Business merchants designed loyalty programs so customers would keep coming back to their stores to shop. Loyalty programs are a marketing strategy that promotes businesses with reward schemes. Loyalty programs are called different things, but they all aim to keep the customers coming back into their store. Some retailers call it a rewards card, advantage card, points card or club card. They are all the same. They are usually a plastic card, very much like a credit card, that will identify the customer by name and keep track of what they do buy in their store.
Loyalty cards usually have a barcode or a chip with a magstripe, that the stores machines can easily scan. When the customer uses the card, they can get discounts right away or they build up points for free dollar amounts to be used on future purchases. Reward points cannot be exchanged for money, but it can be used for goods or services.
Many different stores will allow for points to turn into savings at the fuel pumps, while others give frequent flyer miles or donate to a certain charity. Walmart is the only store that does not have a loyalty card. The only reward they have is if you buy a gift card, you could then get a 3-cent a gallon discount on their fuel. Only 23 states have gas stations associated with Walmart’s.
Loyalty program management companies help businesses and companies to keep their customers. Their customers become loyal to their store and they keep coming back. The manufacturing industry keeps track of their customers from the time of sale to post sale services. Retailers who can keep their customers coming back, also boost their ROI and profitability. Loyalty programs have proven to increase a person’s visit to the store, increasing what they spend per visit and have brought back lost customers.
Retailers are all obsessed with building a loyal customer base. It was once said that it cost five times more to find new customers, than it does to keep the customers you already service. Forbes said at one point that, the customers you already have spent 67 percent more than new customers. So, your largest profit is in keeping the customers you do have, happy and returning to your store. It takes good loyalty programs to keep your customers buying again and again in your store. Some businesses will give more rewards to customers who are valuable and shop in the store all the time. They may get double the points or an extra percent off certain products when they redeem their reward points.
It is also a good policy to reward customers sooner than later. The rewards may be small, but if they get a reward when they earn 5000 points, instead of waiting to reach 10,000 points, the customer will shop more in your store. When customers feel valued and are getting great service every time, they come into your store, they are more likely to return to your store and shop. That’s called a loyal customer.