Customer Loyalty Programs

Loyalty programs are a way for the retailer to encourage the continued patronage of customers.  They allow retailers to gather data on customer behavior in order to decipher trends, appropriately reward loyalty, and influence shopping behavior.

Loyalty programs started back in the l960’s with the S&H Green Stamps program. Thousands of shoppers saved Green Stamps, collecting them from gas stations, grocery stores and other retailers whenever they made a purchase. S&H made money by selling the stamps to retailers. Stores gained customer loyalty with people returning to build their green stamp stash so they could purchase household appliances, furniture and even vacations. Another successful customer loyalty program that paved the way was American Airlines with their frequent flier program.

The most important component for using a customer loyalty program by far is customer engagement.  Retailers should ask themselves, ‘how do I create a partnership with the consumer?’

Accelerating advances in technology are leading to a rapid expansion of customer data, a trend that will continue to grow and transform how companies and customers interact with each other over the next five years. If you are in retail or food service industry using a customer loyalty program is a great way to build customer loyalty. Check out these (4) loyalty services that targeted for small businesses.

Affinity Solutions – Launched in April 2012, the service enables small restaurants and merchants to generate and manage “card-linked offers.” These are promotions that use information about a customer’s past spending with that card to create discounts or offers that might capture your attention. The offers are attached to the card, so they can be redeemed relatively easily.

Belly – Since it launched in August 2011, mobile loyalty technology provider Belly has signed up more than 4,000 merchants across 35 states. The company pitches its service as a replacement for paper punch cards that small retailers often use to keep track of customer visits. Customers can either use a card (one that works with multiple merchants) or download a mobile app that tracks their purchase and the points they are earning.

Perka – Another company explicitly focused on enabling small businesses, Perka is focused on mobile marketing and loyalty services. It currently works with about 500 businesses across the United States. In mid-December, the developer launched a new service called Perka Flexpoints, a mobile app that is meant as a punchcard replacement. Flexpoints links more closely to the customer’s actual purchases. It runs $50 per month per locations.

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