Loyalty marketing is defined as “the effort to identify, maintain, and increase the yield from best customers through long-term, interactive, value-added relationships.” It is basically the creation of programs that aim to recognize and reward customers based on their value to the company.
For big businesses, loyalty marketing is an integral part of their marketing programs. But not for small businesses. Many small businesses, while recognizing the benefits of having a loyalty program, are typically overwhelmed by the effort of identifying customers and tracking loyalty programs. They also lack the prerequisite ability to slice and dice the customer purchasing history; and many do not even have databases of their customers. More importantly, they lack the capability to implement loyalty programs
But if you are thinking of launching a loyalty program for your business, loyalty marketing firm Colloquy has an important study entitled “The Difference Engine A Comparison of Loyalty Marketing Perceptions Among Specific U.S. Consumer Segments” that looked at the response rates to various loyalty programs among the general population and specific customer groups.
According to the study, the following are the average response rates of the general population to various loyalty programs
- Cash back = 54.7%
- Points for free travel = 39.1%
- Points for in-store redemption = 32.6%
- Certificates = 28.2%
- Points for web/catalog redemption = 25.2%
- Discounts = 47.9%
- Upgrades = 20.8%
- Members only information = 19.7%
- Members only access = 13.7%
You can read the study by first registering at Colloquy