Customers prefer targeted loyalty programs
January 10, 2013
Loyalty and gift card programs are becoming increasingly popular among consumers and merchants, especially as the technologies used as platforms for these options - including smartphones and tablets - proliferate rapidly in the market. Small and medium-sized businesses (SMBs) should consider launching these initiatives to drive sales within the first few months of the new year.

Reports continue to indicate that consumers are looking for loyalty programs in greater numbers than previous years. Additionally, many are seeking programs that stray from older, more antiquated models, such as simple punch cards. Retailers can use new technology to their advantage by developing engaging, customer experience-driving loyalty programs.

Consumer preference analyzed
Minnesota Public Radio (MPR) recently reported that many retailers in the state, and the nation at large, are seeing increased revenues resulting from repeat customers following the launch of loyalty programs. According to the news provider, big box retailers and SMBs are both enjoying great successes with loyalty programs, and those with the most engaging options enjoy the greatest success.

Further, the source asserted that while consumers gain obvious benefits from loyalty programs, businesses can use the data collected through these initiatives to refine practices, marketing strategies and more, thus boosting profits even higher. MPR asked business professor Dave Hopkins of the University of Minnesota to explain his take on loyalty programs.

"The whole point is to connect with your customers, and make you the first choice and top of mind," he told the source. "They [retailers] need to consistently deliver on the quality and value that they probably promised in the initial signup. A lot of companies will place a big emphasis on signing people up, and then they don't necessarily get a return on their investment or loyalty program because they're not providing the relevant offers or right benefits to the consumer."

Targeting new markets
Commercial Appeal recently explained that retailers are using loyalty programs to focus in on new customers, as well as retaining long-standing patrons. According to the news provider, customers cite offers that are irrelevant to them as one of the biggest factors that would deter them from a store, even if it's one they would normally frequent.

Thus, the source said that retailers should ensure they are targeting customers in a highly customized and personalized fashion, only sending the offers to those individuals who would receive them well, and keeping the loyalty programs specifically focused on consumer desires.
Nexus: G-WEBCD2