WHAT’S THE MEANING?
A loyalty card program has been defined as an incentive plan (or a program) that allows business analysts and marketing professionals to gather data about its customers through the discount coupons, or a certain reward points system utilized by a certain brand in exchange of the customer’s patronage and voluntary engagement in the program. Another underlying reason why retail businesses implement this is to achieve repeated transactions from customers for a long period of time that will eventually lead to customer loyalty—because according to experts, acquiring new potential and actual customers is more expensive than retaining old ones.
DID YOU KNOW?
Did you know that more than 60% of U.S. households said that loyalty programs are important in their buying decisions? According to Brandon Gaille, loyalty cards play a vital role in the shopping decisions in the U.S. because psychologically, it helps the consumers feel like they are getting more real value for their money from every purchase—and of course, the idea of owning one somehow entitles the cardholder to some advantages and perks—that is why it is considered an imperative for marketers. Marketing Gurus said that it could be one way of expanding business ventures. And if you think providing loyalty program is expensive, you are getting it wrong—in fact, according to the economist Vilfredo Pareto, 80% of a business revenue is generated by the 20% of your loyal customers.