How B2B Loyalty Cards May Drive Future Growth

Loyalty programs are a mainstay across most industries. Accumulate stays at a favorite hotel to earn free nights. Buy a new tent for an upcoming camping trip and earn points towards a cash back award. Other cards may offer loyalty members an on-the-spot purchase discount.

When customers participate in card industry loyalty programs, companies gather data about its customers and invite repeat business. But given the rise in digital popularity, what are the prospects for the loyalty card industry? We asked Jim Cooney, president of CPS cards.

“At both of our facilities— one in the Midwest and one on the East Coast, we have always served the loyalty industry across many sectors including hospitality, restaurant and retail, it’s a key industry for our company,” Cooney said. “We have seen loyalty programs with volumes trending down and we’re pretty sure from what we hear from our customers, that it’s related to people using apps and cellphones for loyalty programs. We have definitely seen a decline.”

While some companies continue to produce the same cards year in and year out, there are fewer companies rebranding and re-issuing millions of new cards, Cooney said. “We’ve been through multiple rebranding efforts and flooded the market with cards. Our last big program for rebranding was 80 million cards and that program started in 2014 and carried into 2015.”

He notes one uptick in the loyalty card segment seems to be in the B2B market, Cooney said a transportation company that offers drivers a loyalty card at a particular gas station might order a small card run (15,000-20,000 cards) featuring custom designs and artwork. Or an entertainment company that once distributed the same plastic card to all loyalty customers might now offer its premium members a higher-end card with upgraded artwork and high-end detailing. This card may also offer more perks and points for the member, since this customer segment’s spend is also higher than the average member.

That’s where Cooney sees market growth over the next decade.

“I think in the next five to 10 years, we’ll see more 1-on-1 customer loyalty cards and more personalization,” he said. “If you get a loyalty card from a sporting goods store and you love golf, you could get a golf-related card. Similarly if you like fishing or hunting you could get a custom card as well. And perhaps when companies send that card to a customer, an additional $5 gift card could be attached. It’s an added incentive.”

While some companies are headed towards more personalization, others are heading in the opposite direction. Cooney said some airlines and hotels that once distributed loyalty cards with customer names on them have moved towards generic cards.

Whatever you do, don’t assume the physical loyalty card is going away anytime soon.

“I’m a firm believer that the card will be around for the next five to 10 years,” Cooney said. “Of course, there will be more cellphones/apps as well. Why can’t we have both?”

For those looking to stay on the cutting edge of the card industry, the International Card Manufacturers Association offers several industry-leading training and education programs about card manufacturing, personalization. These include the Advanced Card Education (ACE) certificate and the web-based Card Industry Training & Education programs, which provide information on key areas of the industry, as well as online tutorials and webinars on specific topics from card industry experts and leading industry suppliers. ICMA also provides regular industry reports to keep members informed of emerging trends and changing standards. The organization hosts three conferences each year. The main event is the Annual Card Manufacturing & Personalization EXPO and the other two conferences are CardTREX North America and CardTREX Europe.

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*The above photo is a card that was awarded an ICMA Élan Award in the loyalty card category.