AT&T REFITS TRUE REWARDS LOYALTY EFFORT;MEMBERSHIP CARD, DISCOUNTS TAKE PLACE OF POINTS TO SIMPLIFY PROGRAM

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AT&T Corp. last week outlined an elaborate makeover of its 15 million-member True Rewards program, doing away with the bulk of its "points" system and incorporating a membership card for the consumer loyalty effort.

A TV, print and direct mail campaign by FCB/Leber Katz Partners, New York, promoting the new True Rewards will break May 1, when the revamped program officially launches.

100 DISCOUNTS

AT&T customers spending at least $5 each month can receive discounts at almost 100 participating companies across the country, including Blockbuster Video, Marriott hotels, Sam Goody/Music-land and Alamo Rent A Car.

This is the latest battlefield in the telecommunications popularity contest, rewarding customers for the slightest bit of attention. MCI Communications Corp. and Sprint Corp. also plan to more aggressively pitch their loyalty programs.

`SIMPLE AND EASY'

"Consumers want rewards to be simple and easy," said Dan Clark, VP-general manager of marketing and sales for AT&T's consumer and small-business division. Traditionally, AT&T didn't reward customers unless they spent at least $25 a month on long-distance calls.

"The future is about multidimensional contact with customers," Mr. Clark said. "We're creating a base for that contact."

MCI, rather than offering a slew of discounts through a membership card, will remain focused on a points system, awarding consumers redeemable points for each dollar spent on long-distance. A targeted direct mail campaign is planned this spring.

"AT&T has virtually taken away its most attractive redemption offers to its customers who spend less than $50," said Terry Macko, MCI's VP-partner marketing.

True Rewards members who spend more than $50 can still accumulate points.

Chet Kane, president of consumer marketing consultancy Kane, Bortree Associates, agrees.

"Loyalty programs should be tailored to consumer needs," Mr. Kane said. "They need to be relevant to customers, or they backfire and generate irritation, not loyalty."

Because of the recent deregulation of the telecommunications industry, analysts expect to see a number of companies trying to become "supercarriers," offering services from telephony to Internet access to satellite TV.

"We can expect extremely aggressive relationship marketing efforts coming out of the industry. The long-distance wars of the past will seem friendly after the supercarriers fight their battles," said Greg Wester, an analyst with the Yankee Group.

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