Ways to make the most of loyalty programs in 2014
December 26, 2013

As consumer behaviors adapt to new technological developments, gift card programs and loyalty programs can help small and medium-sized enterprises keep shoppers interested in an increasingly competitive market.

The growth of social media in recent years has presented a variety of new opportunities for businesses. According to a recent report from the referral marketing software provider NextBee, brands have more access than ever before to consumer interests and behaviors. Because so many shoppers spread the word about their purchases over channels such as Pinterest, Twitter and Facebook, stores now have a much deeper understanding of what makes their clientele happy. In the same vein, small and midsize enterprises must now adhere to higher standards of engagement with their most frequent visitors.

How exactly can businesses use loyalty programs to their advantage in the new year?

Get personal
One of the biggest lessons of the past year's developments in the technologically integrated retail experience is that the spread of customer-specific data must lead to equally customer-centric rewards. A recent article in Colloquy, a customer value publication, said the latest industry innovations make it easier than ever before for stores to come up with loyalty programs that engage shoppers in more meaningful ways.

"Shoppers will react favorably to highly relevant personalized prices delivered in a dynamic way that satisfies their specific needs," the magazine explained.

In other words, businesses can take advantage of social media activity to develop and share rewards with loyal customers. As a result, these individuals will be much more likely to return in the future.

Focus on long-term engagement
Another important issue for companies to consider when they are implementing a loyalty program is to make sure it adheres to overall business goals. While discounts and special, limited-time offers are common features of these customer retention initiatives, they don't necessarily foster long-term relationships that maximize revenue. Instead, retailers should take the time to think outside of the box to find ways to keep shoppers coming back for more than a periodic price markdown. William Rockwell, senior program manager at NextBee, explained in a press release that these strategies may even lead to new entirely new business in the future. As a result, rewards programs end up addressing more than one ingredient for long-term growth.

"Loyalty programs do more than generate repeat customers, they create quality leads through referrals," Rockwell said.

Nexus: G-WEBCD5