(Customer) Loyalty Program

Description of a Customer Loyalty Program. Explanation.

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 Cross-selling opportunities. 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.

Loyalty Programs Forum (3)

What is a Customer Insight Lead? Profile and Responsibilities?
"What is a Customer Insight Lead & what comes in this job profile and what are his/her major responsibilities? Why is this role important for the organisation?"

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."

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