What is a loyalty program? Loyalty programs are schemes designed with an intention to retain existing customers and attract new customers It provides either materialistic or price-wise benefits to customers
What is a loyalty card program? A loyalty card program is a marketing program that rewards customers with discounts and incentives for their repeated business, while providing retailers with information about the customers purchasing habits.
Advantages of loyalty cards Loyalty card programs can help retain customers, attract new customers and improve sales by offering Exclusive deals, discounts and incentives . Loyalty card incentives improve customer service and relationships with customers. it also leads to free publicity hence reducing advertising costso Reduced advertising costs and increased return on investment (ROI) on marketing campaigns are two main business growth advantages. They also help in maintaining good relation with customers and pulling them away from competition
Disadvantages of loyalty cards Decreased Brand Value Reduced Profits Customer Stalking False information Difficult to exit It May Hide Real Loyalty and Satisfaction Levels Risk of falling foul of Consumer Privacy ACT
Why loyalty cards aresuccessful? SavingsLoyalty cards typically trigger discounts on select items on a retailers shelves. The discounts are clearly marked to emphasize the savings so that both repeat customers and new ones notice the advantage of using the card. Without using the card, a shopper does not receive the discounts tied to the card. ProfilingThe use of a loyalty card allows retailers to build an aggregate profile of each customer that uses it, according to Consumer Affairs. The cards inform retailers about the products that each customer purchases and their other shopping habits, such as how often they shop and when they shop. Using the data Retailers use the data collected for marketing and retail strategy purposes. This includes targeting high-spending, frequent customers with special offers and advertisements based on their behavior, according to Consumer Affairs. Sometimes retailers share the data collected in their stores with other retailers.
Future of loyalty cards What is Next? McQuivey offers, "Expect radio frequency identification embedded in the loyalty card of the future, an electronic tag that will identify you when you walk through the door, when youre standing in front of the Pampers, and when you arrive at checkout. All with your permission, of course, and in exchange for a benefit grocery stores have yet to identify."