3 great tips for improving loyalty programs
September 13, 2013

More companies are starting to utilize gift card programs and loyalty programs to retain customers and increase long-term business revenue.

In 2011, a report from the customer research firm Colloquy found U.S. consumers acquired a total of $48 billion in rewards by participating in loyalty and retention programs with their favorite stores. Those numbers have continued to grow in recent years, as smaller businesses have become more interested in rewarding their most loyal customers in more advanced, multichannel ways.

"Most small businesses haven't had the resources to do that in the past, relying instead on programs like punch cards to engage with customers," Emily Collins, an analyst at Forrester Research, told The San Francisco Chronicle.

Effective gift card programs and loyalty programs aren't limited to large corporations and retail businesses. Here are a few tips for small companies interested in maximizing customer retention through a multichannel loyalty program:

1. Keep close track of customer data
M4B Marketing, a consulting service, said keeping an active and highly detailed customer database is a useful tool in fostering long-term customer retention. For example, every time a shopper makes a purchase, businesses can record the data and watch it steadily accumulate. This way, a company can easily figure out which customers are spending the most and develop ways to reward them accordingly. High-quality purchase data is also helpful in allowing businesses to develop their gift card programs and loyalty programs in ways that relate directly with customer preference. If shoppers make the greatest number of purchases over electronic payment systems, a business can craft its rewards program to easily fit that specific medium.

2. Eliminate the barriers between popular channels
A multichannel approach to customer loyalty is another important strategy to consider. More than ever, shoppers appreciate the convenience of interacting with their favorite brands with equal value on a variety of platforms. According to Retail Info Systems News, expanding the number of digital tools customers can use to access their rewards creates a rich experience that delivers heavily on quality service.

3. Don't forget the importance of great customer service
Business shouldn't separate their gift card programs and loyalty programs from the delivery of strong customer service. In fact, the two are closely interconnected. Shoppers tend to return to brands that offer the most satisfying experiences. Therefore, a loyalty program not only rewards people for their continued service, but also encourages them to keep coming more often.

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