Definition Customer Loyalty Program. Description.
A Customer Loyalty Program is a marketing method to
encourage customers to buy or continue to buy certain products or services.
This could be products or services of one company or of a group
of companies who are working together. The loyalty program can be run
by the organization that is selling the products or services or by an independent
loyalty program organization.
The aim of most programs is to influence the customer to make
repeat purchases. On top of that, the customer data that is
collected when customers make purchases using their loyalty card is a form
of Relational Capital, which
can be analyzed using database management, datamining or
Analytical CRM software. The analysis
can be exploited to reveal purchasing patterns or
Smart cards can be used to improve data capture.
A typical example is the shopper card or customer loyalty
card, which gives a discount or points or other benefits to card holders
when they are making purchases while showing their card. It is possible that
also other parties might be involved. For example charity organizations
or sports clubs might receive certain benefits too when their members make
purchases using the loyalty card that is associated with them.
Customer Loyalty Programs are a form of Permission Marketing.
Also called: loyalty program, incentive program,
loyalty scheme, loyalty card, shopper card.
||ROI of Loyalty Programs
"A comparison of sales between regular customers and loyalty customers will provide a variance. If the value of this variance exceeds the resources expended on the loyalty program there is a positive Return on Investment on the loyalty program (project).
The caveat is that the loyalty program must be given time enough for the repeat customers to demonstrate their loyalty."
||Measuring Loyalty Programs in Mktg Comm
"If we propose a loyalty program for an online electronics store. A program that has soft and hard benefits, how does one measure a loyalty program through ROI? I have to justify this with case studies or academic journals. Any help would be appreciated."
Loyalty Programs Special Interest Group
Customer Loyalty |
Model | SERVQUAL
Relational Capital |