How many loyalty cards do you have? Well, I just cleaned out my wallet and found 25 loyalty cards. Twenty-five. Some were from restaurants. Many were from retailers. I was a little surprised, because, that number does not even include the digital programs I belong to through my credit cards.
Why so many? Well, apparently I shop too much, so that might have to be a new year’s resolution. But I can tell you that I buy from every one of those businesses—regularly. I like receiving rewards for my loyalty.
And I am not alone. Loyalty programs are pervasive.
Accenture Interactive found that customers in loyalty clubs generate between 12 to 18 percent more revenue than customers not in loyalty programs. What’s more, loyalty program members rate their customer experiences higher than nonmembers—across most industries.
Also, I am in the majority with my numerous memberships. American households are members of 29 loyalty programs spread among several industries. However, they are only active in 12.
Again, like me, consumers join the loyalty programs of brands they like, and their participation in those programs influences their shopping behavior (i.e., where they shop, what they buy, and how much they spend).
Most customers gravitate toward loyalty program membership as a way to save money, but they also want something extra. If they do not receive the kind of recognition and service they are looking for, they drop out (just like the statistic above points out).
Therefore, punch cards will not cut it anymore. Almost 60 percent of adults in customer loyalty programs say that getting special offers or treatment (not available to other customers) is important to them. Fifty-six percent (and this percentage is growing) want enhanced customer services, such as member-only events or services.
The bottom line? Discounts are great, but today’s customers expect companies to know their preferences and their history—no matter whether they shop online or in a physical store. But that is not all. Those customer preferences will change. So customer loyalty programs must too.
So what is a small- to medium-sized business (SMB) to do? Develop the right loyalty program that will provide value to customers, drive meaningful experiences, and develop influential brand advocates. Loyal customers are not the exclusive domain of large companies.
With the right tools, SMBs can build the right loyalty program to promote and shape consumer behavior and grow the business. Here are five things to think about as you develop your loyalty program.