Traditional Loyalty Programs – Business Requirement or Pure Hygiene or Customer Focus???

Does every loyalty program or solution necessarily revolve around Earn & Burn? Can we visualize a loyalty program without a reward catalogue or redemption??
A brain-storming session with a client led me to ask myself and all of you this question.
We would love to be a part of a Loyalty Program of a company purely for reasons known to us. There could be hundreds of different reasons for getting us enrolled in a program, with very little point calculations & redemption in our minds.
How many of us look at the rewards catalogue, choose a product and then get enrolled? Would this be very difficult? – Not really, let me explain this with a live & simple example – I was about 8 yrs old when a chocolate company came with a tactical (loyalty) program (will decide later whether this was a loyalty program in the 1st place). There were some very attractive gifts aimed at our age group by redeeming against wrappers. Looking at the ad, I knew what I wanted and saw how many points would I require to win this. This program lasted for approx 3 months. I followed it, purchased hell lot of chocolates and finally won (have purposely mentioned the word ‘won’) it. A program that enticed me to WIN a desirable gift primarily & an activity of purchases was positioned as a secondary factor.

It is strange that Marketeers have forgotten the very aspect of human tendency – to forget things / program will run out of fizz if you don’t excite customer today. I would want to question the very need of creating a loyalty program –
* Does it really impact business / should it only mean clinging cash registers (because if that is a case – than a healthy & wealthy competitor can cut in your pie, just anytime)
* Are customers coming to your store because of the program?
* Will the same profitable customers stop shopping at your store?
* Is it only because of points of a program that a customer feels like choosing your store compared to the competitor?
* Is it like the hygiene factor – just like a store should have a good layout and ambience, they should also have a loyalty program

Some points to ponder on what I am really trying to say –
# Can we look at Loyalty Programs not only for incentivising customers but for various other things (which are softer aspects of business) like appreciating the fact that they walked into the store, appreciating / rewarding / recognizing their feedbacks, rewarding spontaneously for just being with us
# In every case, we still treat a customer like a customer – why can’t we make him a part of our family?
# Why does he have to go on collecting points for ever?
# Is reward always have to be a tangible benefit?