Loyalty programs give customers incentives to stay loyal, such as discounts, coupons, free merchandise or advanced access to new products.
To receive these rewards, customers give their personal information to your company. When linked with demographic information and buying behaviour, this provides your company with a wealth of customer information.
Loyalty programs are intended to increase customer retention rate, turnover and brand loyalty. Existing customers cost less to reach, cost less to sell to and are less likely to be influenced by the competition, compared to prospects (potential new customers).
Loyalty programs increase the customer retention rate of companies. Increases in a company’s customer retention rate as low as 5%, can increase profits by 25% – 125% (research by Reichheld and Sasser, Harvard Business Review). Additional research by Sisodia and Sheth (PDF), published in the Journal of Business Research, points in the same direction.
Address System can help you to design, develop and deploy your tailor made loyalty program, in order to increase brand loyalty and Customer Lifetime Value.