What makes a great loyalty program?
November 18, 2013

Businesses in a variety of industries are able to leverage gift card programs and loyalty programs to attract new customers and retain existing ones. Whether it's a restaurant that rewards diners for continued visits or a small local retailer that engages shoppers through a gamified system, the use of these tools can have positive impacts on long-term revenue.

However, the ongoing evolution of consumer behaviors and preferences has made it difficult for small and medium-sized enterprises to keep their loyalty programs up to date with the latest technology. For example, the travel website Skift said shoppers in younger generations are more likely to expect the ability to access rewards through mobile devices such as smartphones and tablets. While not every small company may have the resources available to offer such advanced services, the fundamental elements of a quality rewards program are easily obtainable in any context.

What exactly does a quality loyalty program look like?

Both consumers and businesses should be able to reap the rewards of these initiatives without performing any extra work. According to Fast Company, an excessive amount of rules, restrictions and other regulations can end up deterring customers. Similarly, the difficulty of processing transactions made through gift card programs and loyalty programs can take a toll on store owners if they haven't invested in the right technology. The best practice is to keep it simple.

Quality marketing
Research from the University of California, Berkeley's Haas School of Business found loyalty programs are most effective when customers already purchase on a regular basis. As a result, small and medium-sized enterprises must make concerted efforts to supplement their rewards initiatives with effective marketing techniques. The ability to receive discounts on goods in exchange for continued purchases is an attractive benefit for many consumers. However, these shoppers must already be interested in the brand in the first place.

Nexus: G-WEBCD5