Frequency marketing is the term applied to any program designed to generate brand loyalty and cultivate a long- lasting relationship with customers. Specifically, it encourages and rewards the ongoing purchase of products and services.
Frequency marketing has existed in one form or another for a long, long time... One of the early programs began in an A&P grocery store in New York City with trading stamps. Stamps were collected as rewards for purchases and redeemed for fun merchandise or gifts. It was a guilt-free way for families to shop for discretionary goods. People enjoyed the process of pasting the stamps in books, setting their goals, then attaining their rewards. And, of course, they kept going back (thus the frequency) again and again to the store that provided the stamps.
After the idea became successful, everybody put the program in place. Shortly after this all the grocery and gas station chains had trading stamps, and they became meaningless. Today, something similar is happening with frequent flier programs. Now that all the airlines have them, the competitive advantage is lost, and many airlines would like to drop them. There are also emerging "club" systems, such as employed by Safeway, where you feel obligated to first join the club for savings and to then return to the chain of stores as a repeat purchaser. They are a great idea, but they have to be well strategised and constantly rethought and reapplied.
ADVANTAGES OF FREQUENT BUYER PROGRAMS
Frequency marketing programs help to retain consistent customers and win new ones as well as lower marketing costs and build brands. They generate increased frequency of visit, stimulate faster purchase cycles, add value, and make the sponsoring company stand out from the competition. They lock in consumer loyalty and make consumers resistant to product or service promotions by competitors. Effectiveness is easy to measure, and a valuable database is put in p...