5 Reasons Loyalty Programs Work For Commerce

by Sean Ogino |

5 Reasons Loyalty Programs Work For Commerce

Lets face it, we are all fans of rewards points. I certainly am. It’s the reason why I shop at Target so much. It all started for me when I signed up for the Target red card. While they have a credit card option I opted for the debit card. Why? Because I get 5% off on all purchases in the store and on their website. They recently got me to switch my pharmacy, and here’s how. By making me a rewards program member. It’s quite simple really. Once I fill 5 prescriptions I get a rewards certificate good for 5% off  that I can use to  shop in the store or online. If I combine it with my red card it adds up to a total of 10% off my entire order.

While this article is not about Target, it’s more about the power of what a good loyalty program can do for your business and your customers.

Help differentiate your online store

In today’s internet world buyers, are faced with many more brands competing for their business and increased buying options. Because of these options, converting site visits into sales has become much more challenging than ever. Loyalty programs help online stores grow brand awareness. Online stores that run loyalty programs such as rewards points were more important to their customers, than their competitors that did not offer such programs.

Loyalty programs stimulate return visits

what loyalty programs work

Loyalty programs are designed to cultivate loyalty and trust to a business, which results in increased revenue from return customers. We have seen increases of 5-10% revenue increase attributed to loyalty programs from our clients. Quite simply, customers will return more often if they know they are getting rewarded for it.

Loyalty programs lead to an increase in positive customer feedback

Thumbs up
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While loyalty programs have a positive impact on return sales, they also have the power to influence positive reviews for your business. Stores that offer customers the option to join a rewards program tend to have a higher percentage of positive reviews than those that don’t.

Loyalty programs continue to grow

plants growing
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Research conducted by Accenture shows that “customers are bound to be loyal if retailers personalize experience and integrate loyalty programs – online, in store, on social media, via mobile and tablet.”
Heres a look:
32% of shoppers said their loyalty to a favorite retailer has increased over the last year.
23% said it was because of a loyalty program.
48% of shoppers are comfortable giving their information in exchange for personalized communications.
30% of purchase decisions are influenced by promotions or recommendations based on purchase history.
30% of shoppers are currently influenced by real time, location based promotions.

Loyalty programs help you learn more about your customers

social media learning
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Loyalty programs help a business learn about their customers. Analytics make it possible for businesses to target specific customer groups, adjust product offerings and promotions in a physical or online store. A great example of an enterprise business that use analytics is none other than Amazon. More than a third of their business is generated through customer data driven optimization of their product recommendations, inventory and marketing campaigns.


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