Why are loyalty programs so important in today's business world?
October 11, 2013

Gift card programs and loyalty programs can have a significant impact on long-term revenue growth at small and medium-sized enterprises. Especially during periods of slow economic growth, shoppers are generally conservative with their wallets and overall hesitant to interact with new brands. As a result, the ability to encourage existing customers to continue making purchases no matter what the economic situation has the potential for substantial payoffs.

According to Forbes, today's increasingly competitive business environment has changed the ways companies understand the nuances of retaining customers. For instance, the source said most enterprises used to view the concepts of shopper loyalty and customer retention as the same. The terms were thrown around interchangeably in reference to the ability to influence consumers to keep returning after their initial experiences. Forbes said that now however, loyalty depends more on offering satisfying experiences for customers that ultimately lead them to share their positive opinions of the brand with friends, family and other potential shoppers.

Gift card programs and loyalty programs must be fully integrated with new technologies such as social media and mobile credit card processing to enhance engagement and function as a recruiting tool for finding new customers. Entrepreneur said the cost of attracting new clients is often much higher than expected for many business owners. Advanced rewards programs that take advantage of mobile and social media capabilities can significantly reduce these overhead costs in the long term.

A recent report from Forrester titled "The State of Loyalty Programs 2013" said many companies around the U.S. are finding success with these tools. According to the study, 45 percent of consumers enroll in rewards programs. Among businesses surveyed, more than half claimed their gift card programs and loyalty programs are used to capture enhanced data and transaction information from returning shoppers.

Nexus: G-WEBCD2