The Billion Member March: The 2011 COLLOQUY Loyalty Census Growth and Trends in Loyalty-Program Membership and Activity

America, it may be time for a bigger wallet.

In the 11 years since COLLOQUY conducted our first study of the loyalty-marketing industry, the number of memberships among U.S. households has grown steadily. Back in 2000, ours was simply an exercise to gauge household participation in loyalty programs. But the results inspired us to return to the lab in 2006 and 2008, when we performed much more ambitious studies. These massive undertakings resulted in our milestone CensusTalk white papers, which continue to serve as the benchmark of the U.S. loyalty-marketing industry, relied upon by industry leaders and the business media.

And so it was with a sense of duty, as well as anticipation, that we launched our third Census analysis. The 2011 COLLOQUY Loyalty Census is the result of exhaustive research by the COLLOQUY team, which examined membership numbers for what we believe is more than 96% of all loyalty programs in the U.S. (4% of memberships are estimated from proprietary and secondary research resources).

Once again, the results do not disappoint. Our research reveals that for the first time in history the number of loyalty memberships in the U.S. exceeds 2 billion, netting out to more than 18 memberships per household. That’s up 16% from the almost 1.8 billon memberships counted in 2008, or 14.1 programs per household. In Canada, we counted 120.7 million members, up 3.9% from the 2009 COLLOQUY Loyalty Census.

Likewise, the U.S. figure, though a milestone, does represent a slowdown in growth from the 2009 COLLOQUY Loyalty Census research, which showed a membership increase of 34%. A deep dive into the different industry sectors reveals unexpected trends that explain the deceleration. We’ll deconstruct the causes and motivations later in this white paper.

The good news is that more North Americans are inspired to commit to their favorite chains and brands due to the benefits they get from loyalty programs. The disappointing news? The number of active members in the U.S. (8.4 per household) is still less than half the total. Yet the value of all of those rewards, points and miles earned is substantial – almost $48 billion. (For details, see “The  Value Quotient” on page 3.)

The takeaway: The Great Recession cut both ways for loyalty marketing. For some industries, it signaled a need to tighten the belt on rewards program offers. For others, it inspired them to leverage loyalty as tool to distinguish themselves from competitors. All together, companies – and consumers – are much smarter about using loyalty programs.

Buried Treasure: The 2011 Forecast of U.S. Loyalty Program Points Value

To borrow a wry observation from Mark Twain, reports of the stagnation of the U.S. rewards industry have been greatly exaggerated. As a matter of fact, such reports overlook a remarkable windfall for consumers, issuers, merchants and manufacturers lurking below the surface of multiple, sometimes conflicting views of the rewards industry. In other words, buried treasure.

The total perceived value of points and miles issued in 2010 in the U.S. for consumer-oriented rewards programs is estimated at $48 billion. This finding comes from a new study, the 2011 Forecast of U.S. Consumer Loyalty Program Points Value, the outcome of a collaboration between COLLOQUY and SWIFT EXCHANGE. To understand the potential scale of this treasure, it’s worth noting that this $48 billion in perceived rewards value is issued annually by a formidable array of industries participating in the approximately $3.9 trillion that made up retail spend by U.S. households last year. These extraordinary numbers not only underscore the breadth and depth of consumer spending in the Travel & Hospitality, Financial Services and Retail categories, but also cast a critically valuable light on the penetration of rewards currency, which has become woven into our social and economic fabric in ways unimagined three decades ago when the first rewards programs were launched.