More consumers opt in to loyalty programs
June 18, 2013

Small- and medium-sized businesses utilize integrated payment systems to drive sales and offer multiple purchasing platforms for consumers to use their preferred payment method. One of the strategies SMBs employ to generate return business is offering customers gift card programs. Retailers with loyalty programs often see a boost in participation during the holiday season, but according to a recent study, the initiatives have been on the rise year-round since 2011. 

Increasing demand for loyalty programs 
According to Drug Store News, many retailers have noticed an increase in the number of customers opting in to their loyalty programs since 2011. During the past two years, the initiatives have grown 45 percent, according to a new study. The "2013 Colloquy Loyalty Census" found there are now 360.5 million specialty retail memberships, compared to 142.4 million in 2011. 

Colloquy, a research firm, examines customer analytics and loyalty program performance on an annual basis. 

The study found department store initiatives rose 70 percent in the past two years. Specialty retailers saw a 26 percent increase in loyalty program participation. However, supermarkets had the lowest amount of growth at 1 percent. 

The report highlighted consumers' need to save money during the financial crisis. As the economy recovers, the recession remains in many customers' minds and they continue to seek discounts. Loyalty and gift card programs allow consumers to cut costs by taking advantage of special deals and sales. 

Jeff Berry, the report's author and research director at Colloquy, said while recent economic improvements helped customers feel more financially secure, the recession has not left consumers' memories.

"As the economy slowly breathes new life, loyalty programs have gained increased awareness," Berry said. "We expect continued growth as increasingly sophisticated programs revitalize engagement with existing members and attract new participants."

EMarketer suggested SMBs can continue boosting their loyalty program participation by employing a few best practices. Targeting consumers through mobile marketing and aligning gift card initiatives with payment processing techniques help SMBs ensure their customers get the most out of being active loyalty program members. Retailers should consider providing incentives for customers to enroll in the programs to increase participation rates. Keeping applications simple and to the point may help SMBs encourage consumers to opt in to programs. Ensuring the loyalty program provides value to the consumer can help SMBs drive participation and sales.

Nexus: G-WEBCD6