Your local coffee shop, pharmacy, favorite fast food place, and grocery store are all very different businesses. Still, they probably have one thing in common. Chances are, each of them offers some kind of customer loyalty program.

With a good loyalty program, you can increase sales, boost customer loyalty, and earn repeat business. Keep reading to dig into these reasons your business needs a customer loyalty program, and more.

1.   Use Them as a Marketing Tool

You can use your customer loyalty program with any discounts, purchase points or other perks in combination with other sales. By showing customers how they can stack their loyalty rewards on top of other savings, you’ll be able to power up your sales campaigns.

2.   Build better Customer Relationships

When you get customers to sign up for your loyalty program, you’ll collect information that you can use to improve your relationship with them. Customers who sign up will provide you with information such as their birthdate, email, a preferred method of communication, even their reasons for being interested in your products.

Use this information to your advantage. Send customers best wishes and a gift on their birthdays. Let them know when their favorite product goes on sale. This VIP treatment is sure to get customers to think highly of your business.

3.   Motivate Customers to Return

You can offer digital loyalty cards that allow customers to accumulate points and other benefits over time. This creates a great incentive for customers to keep returning to accumulate more rewards. This is especially the case if customers know they have a gift, or other perk coming to them. If you’ve ever used a coffee shop punch card to earn a cup of your favorite cappuccino, you’ve been lured in by that company’s efforts to create repeat business.

4.   Boost Customer Loyalty

Improved customer experiences, better relationships, attractive deals, and the opportunity to earn rewards, are all factors that increase customer loyalty. It’s really simple. Customer loyalty programs give you the information and tools you need to treat customers better. In return, they are much more likely to prioritize doing business with you. Even better, they may be willing to recommend your brand to others.

Mary Fincher, a head of content at TopEssayWriting and GrabMyEssay writing services says, “When companies can use data to better customize online experiences for customers, engagement increases significantly. Website navigation, page content, even online product recommendations can be improved the more that is known about customers’ interests and preferences.

5.   Attract New Customers

Imagine being on the fence about purchasing a product. Perhaps you’ve narrowed your choices down to a couple of different brands. Everything is pretty equally weighted in terms of product quality, availability, and pricing. This is where a loyalty card or digital rewards program can give you a competitive edge. When a customer knows they will receive freebies or discounts for doing business with you, they may choose your business over a competitor’s. Customer acquisition is expensive and labor-intensive. A customer rewards program can help with that.

6.   Collect and Track Data

In a way, these programs allow you to conduct a bit of market research. As you are able to determine which rewards are more attractive and receive feedback from customers, you’ll be better able to customize your program.

In addition to this, your program will allow you to collect information about your customers, and their purchases. This information will provide insights for your sales team, marketing department, even research and development.

7.   Increase Sales

Once you have all of this useful data, you can use the information you’ve gathered to create personalized customer experiences. You’ll be able to recommend specific products that you know will meet each customer’s needs. You can even create customized deals and offers just for participating customers, based on their use of the loyalty program.

Also, if your customers are able to accumulate points or other bonuses as they make purchases, that’s further motivation for them to spend more money. This could lead to an increase in sales per cart as well.

8.   Loyalty Programs Are Easy to Maintain

With a rewards program, the most effort tends to come in the setup process. Once you make the upfront decisions and implement the program, your work is largely done. As long as you choose the right provider to manage your digital rewards program, customers simply accumulate points and redeem various rewards.

9.   Connect Brick & Mortar and Digital Channels

With a digital rewards program, you can offer customer-centric rewards in both your brick and mortar locations and online. In fact, you can even incentivize customers to use a specific channel so that you earn traffic and engagement where you need it. For example, you could offer double rewards points for customers who order carryout service, or a special discount for rewards members who purchase items through a specific landing page. Finally, you can use the information you learn about a customer in one channel to better customize their experience in the other.

10.   Compete on Something Besides Price

If you own a small business, competing on price is often a losing effort. Because larger competitors are usually in a better position to negotiate with suppliers, they can sustain low prices for quite a long time. That’s not something a small business owner can do. More importantly, getting involved in ‘price wars’ may not help you establish the brand reputation that you want. Do you want to be the Mercedes Benz E-Class of your industry or the Ford Fiesta?

If you prefer to be the Mercedes, a well-run loyalty program allows you to create elevated customer experiences, build brand loyalty, and compete using factors other than price. This puts you in the position to allow your competitors to fight over price amongst themselves.

Final Thoughts

When brands like Starbucks, Walgreens, and your local convenience store offer customer loyalty programs, that’s a strong indicator that these programs work. Unlike other marketing schemes that may or may not work depending on your audience, a loyalty program tends to have very wide appeal. If you choose a loyalty program that appeals to your audience and is low-effort (e.g. a program that doesn’t require using an app or integrates with existing payment platforms), it’s sure to be successful.

Bridgette Hernandez is a Master in Anthropology who is interested in writing and is planning to publish her own book in the near future.  She works with professional writing companies such as BestEssayEducation.com and SupremeDissertations as and as a writer, Brid also does some editing work at TrustMyPaper. The texts she writes are always informative, based on qualitative research but nevertheless pleasant to read.