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Loyalty Programs: A Simple Cost Effective Approach to Knowing More About Your Customers

Published November 6th, 2017 by Servistree

Loyalty programs have been growing in popularity over the last several years as they provide a mutual benefit for both the customer and the business. The customer receives bonuses like discounts and other perks while the business gets customer that is, well, loyal. That is to say, loyalty programs give businesses a competitive edge when it comes to building a customer base. Memberships in loyalty programs in the United States increased by 10 percent per year between 2008 and 2012 which equates to an average of 23 loyalty memberships per American household.

But some business owners are wary of loyalty programs because they feel that they benefit the customer far more than the business. So do loyalty programs really have sufficient value for business owners? A McKinsey study involving more than 50 publicly traded companies in Europe and North America suggests they do not. The companies in the study that had a visible loyalty program showed almost the same rate of growth over a fixed period as companies that did not.

But the problem is not that the programs themselves do not work but rather that they are poorly implemented. Plenty of companies have developed loyalty programs that have resulted in significant, sustained, and long-term growth in revenue. So what did these programs have in common?

Rewards Should Go Beyond Just Freebies – Conventional wisdom says that the alpha and omega of a good loyalty program is giving member customers free stuff. But while everyone loves getting something for nothing, they also like variety and creativity. The most successful programs transcend the traditional freebie and reward customer loyalty with sweepstakes like trips and cash prizes or digital content. Brands that are strategic about the rewards they offer tend to have more successful loyalty programs.

Rewards Should Have Intrinsic Value – Too many companies give rewards simply for the sake of doing so. But customers appreciate when they are rewarded for their loyalty with things that are more closely tailored to the type of customer they are. That depends a lot on the products and services offered by a given company. 

Customers want things that are related to those products and services –which is why they are a loyalty member in the first place – but they like to be rewarded with things that are either out of their price range or that are not offered for sale on the company’s website. The feeling of exclusivity is very powerful when it comes to customer retention.

Cash! (And Maybe Gift Cards) – Everyone loves free money. In fact, many of the most successful loyalty programs are ones that offer cash and/or gift cards instead of “stuff”. Offering cash and gift cards also eliminates the overhead and shipping costs associated with giving away physical items.

Loyalty Programs and Social Media – Every business on the planet is on social media (or at least it should be) and those whose social presence includes their loyalty programs have far more success with those programs than those whose does not. Social interaction motivates and as such, loyalty programs apps, websites, and other customer touchpoints that are socialized are far more effective and make for more successful overall programs.

Many companies believe that implementing a loyalty program is too expensive or too much of a hassle to be worth the trouble. But with your company can implement a loyalty program quickly, effectively, and at minimal cost. Contact us now to find out more by calling 866-944-3244 or visiting

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