Why Customer Loyalty Cards Work

Today, many retailers have adopted loyalty programs as a means of differentiating themselves from their competitors. Loyalty cards work because they are an easy, inexpensive way to keep customers coming back, week after week.

Rewarding Customers

From grocers to electronic retailers to big box stores, retailers opt to offer their customers loyalty cards which give back anywhere from 1 to 2 percent of their total purchase.

Typically, the rewards to customer come in two forms. Customers either receive benefits such as money back, or they receive tailored coupons, coupons which fit their shopping patterns. These tailor-made coupons and their benefits to individual shoppers build over time. As a customer shops more with the retailer, the retailer begins to understand the customer’s shopping habits, rewarding them with coupons better fitting the customer’s needs.

Customer loyalty cards, which offer these tailor-made coupons often work better than those which simply offer a small percentage of cash back, because coupons ensure the customer will keep shopping within the store. The more a consumer spends in the store, the more information the store can collect regarding consumer shopping habits. This, in turn, allows the store to provide customers with more relevant rewards. The more relevant the coupons, the more likely it is the customer will return.

Increased Dollar Spent

Often, the better the rewards, the more a customer spends inside the store. Loyalty cards are an inexpensive way to put a rewards program in place and gives store owners a chance to reap the money benefits too.

Another way to get the most out of customer loyalty cards is to create a tiered system. The more a shopper uses the card, the better their rewards. With some retailers, this may mean high dollar coupons, or it might mean rewards such as discounts on flights, spas, restaurants and more. In this way, tiered systems can motivate customers to increase their spending to help them reach the next rewards level.

Manufacturers Buy-In

Manufacturers tend to invest significantly in retailer promotions, and targeted coupons/points programs via customer loyalty cards are a great way retailers can get manufacturers to help fund promotional ideas. A rewards program basically encourages customers to purchase specific brands.  

Overall, customer loyalty cards are a simple, effective way to inspire customer loyalty while increasing profits. They benefit the customer and the retailer. It’s a win-win! This simple tool will keep customers coming back week after week to save money or achieve tiered rewards. 

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