Last month, I emptied my wallet of all the cards that had been weighing it down.  I removed 12 loyalty cards in total from varying rewards programs: 3 from airlines, 2 from bookstores, 2 from department stores, 2 from supermarkets, and 3 from hotels.
 
This is testament to the ubiquity of loyalty programs.  Almost every company I know, across industries, offers one. With the proliferation of card programs, many have ceased to become differentiators between companies due to unrestricted availability and uniformity of rewards. Companies must take their programs to the next level. Consumers are now experts in detecting value propositions. Don't let your loyalty program become another "me too" proposition. Avoid under-funded, unimaginative efforts that fail to reward and recognize your most important asset – your best customers.
 
Here are 3 ways to take your customer loyalty program to the next level:
 
1) Offer experiential or aspirational rewards that are difficult for a competitor to duplicate.

These could include once-in-a-lifetime experiences, premium merchandise or lifestyle-themed rewards that are value-added, emotional, and unique. For example, Harrod's of London offers loyal customers a chauffeur-driven trip to a jeweler to create their own jewelry; a day trip to Florence with their bed linen buyer; or spend a day on Chairman Mohamed Al Fayed’s 65,000 acre country estate. Sephora offers limited-edition sample sets of products, handpicked sets for members, free in-store beauty classes, and additional products that are not available to those who are not members of its loyalty program. Continental Airlines offers mileage auctions for Grammy Awards tickets and backstage passes to Broadway musicals.  Locally, Rustan's Supermarket offers its top customers their own lane for quick check-out, a once-a-year member's only sale, and invitations to exclusive events like wine and cheese tasting.
 
2) Look for unique and exciting programme partners that complement your brand and leverage them.

Partnering with non-competing brands to offer a more powerful value proposition for a program offers many advantages.  You increase the value of your program by offering rewards in other complementing establishments.  You  minimize your expenses, while tapping a customer base that you did not previously have access to.  Some examples of local partnerships include Shell and SM, and Philippine Airlines and Petron.
 
The coalition model of loyalty is also a powerful way to amplify the reach and power of your program.  The coalition model is when 3 or more companies share branding, operational costs, marketing expense and data ownership of a common loyalty currency.  The top loyalty coalition programs in the world include Air Miles Canada, Nectar in the UK, and Fly Buys in Australia.
 
3) Go digital.
The use of smart phones and/or tablets and QR Codes to earn, redeem and monitor customers’ points and activity is starting to gain ground.  With the growing ownership of smart phones on the rise, cards will eventually be phased out.  With a digital program, you simply have to click on an app and scan to check in or to make a purchase.  It's fast and convenient.  Mobile phones have the further advantage of being able to store multiple programs, issue deals and coupons that are instantly redeemable, and customize product recommendations and send personalized rewards to shoppers based on their in-store location. For example, if you happen to be standing in the shoe department of a department store, you will receive a notification on your phone that shoes are on sale for that day at 10% off.  Shopkick in the U.S., allows customers to earn "kicks," each time they enter a participating store. These "kicks" can be redeemed for rewards.  
 
It is important to keep in mind, however, that while technology enables, it is imagination that wins in the end.  All the technology in the world cannot compensate for an unimaginative, poorly conceived and inadequately managed program. 
 
With all the hype surrounding loyalty programs, can a loyalty program actually engender loyalty? Not on their own.  Customer loyalty derives from a complex interplay of many factors that include the brand, experience, product attributes, price, and circumstances.  A loyalty program is merely a tool that can help the cause of loyalty.  Done right, it can lead to more customer purchases more often.  It can enable a company to mass customize its communications and offers. It can allow you to track trends in your customers' purchasing patterns and behaviors. Ultimately, it can lead to longer and more profitable relationships with your customers.  
 
Frances Yu is the Chief Retail Strategist of Mansmith and Fielders, Inc. She runs breakthrough Mansmith programs, 2nd Power Brands: Attaining Retail Marketing and Branding Excellence and Power Tools: Earning and Keeping Customer Loyalty. For comments and other inquiries, email mentors@mansmith.net