The Global Loyalty Infusion: Best Practices and Innovations Around the World

Toronto, where I live, features some of the finest fusion restaurants in the world, serving everything from kosher sushi to chutney wontons to jerk wuxi pork. This mix of vibrant flavors provides apt metaphor as we consider the best practices of loyalty programs around the globe. Even in today's saturated marketplace, we find a full menu of loyalty innovations to spark the marketing palate.

With these tastes in mind (and a glass of wine in hand), here's a look at some of the current trends and best practices.

Open-source loyalty. We've seen a burgeoning trend in which marketers have outsourced loyalty value proposition design to the most effective design team available—their own customers. In 2006, Turkey's Garanti Bank launched the Flexi credit card, which allowed card applicants to craft a custom-made reward card by choosing from a menu of rewards, repayment schemes and interest rate options. Cardholders even design the look of the card and can upload images from their own collections.

In the U.S., the Chase Freedom Card allows cardholders to switch between cash-back and points rewards options as desired. Capital One recently took a cue from Garanti Bank with the Capital One Card Lab, which likewise allows cardholders to design their own rewards credit card online. By bringing customers in on the value proposition design, these card issuers are front-loading their rewards programs with personalized, relevant offers that differentiate in a crowded market.

Open-source marketing extends to reward redemption as well. In the United Arab Emirates, Ehitad Airways' Etihad Guest program features a Web site slider that allows members to create personalized cash-plus-miles awards. The cost of entry? Just a single mile. Credit card concierge services that follow in the footsteps of Diners Club's "Personalized Rewards" and American Express's "Your Reward" allow members to dream up their own rewards, from personal wine cellars to orthodontia for the kids. In an age of marketing saturation, loyalty marketers will continue to innovate by making their customers true partners in the brand relationship.

Partnership marketing. Coalition loyalty programs—where which a core group of sponsor companies works with a third-party operator to issue a common loyalty currency to members—thrive around the globe. Canada's AIR MILES Reward Program, The U.K.'s Nectar, Germany's Payback, New Zealand's FlyBuys, Brazil's Dotz and other programs have all enjoyed sustained success. Newer coalitions also continue to launch; India's i-Mint program recently announced signing its 2-millionth member after a year of operation. Coalition programs provide sponsors with a shared data platform to build acquisition and a shared marketing platform to reduce costs and increase response rates.

As successful as the coalition model is, other creative loyalty partnership models are thriving. In the U.S., a national coalition program has yet to launch, but partnership marketing—a licensed currency model in which a company buys loyalty currency to offer to their customers—is taking root. Citi's ThankYou Network, for example, recently partnered with Expedia to create a new layer of robust travel earning and reward options for ThankYou members. In Australia, Choice Hotels' Choice Privileges program and Virgin Blue Airline's Velocity program have teamed to make their rewards currencies easily interchangeable. Such loyalty partnerships will help more companies achieve critical mass, and will transform the loyalty industry by creating additional value for members, partners and stakeholders.