Patrick Whelan

One of the most powerful ways to deepen customer loyalty is to reward your customers for sticking with you. This is why loyalty programs are so popular. But there is an additional benefit, too. Customers actively participating in loyalty programs not only continue to buy from you, but they spend more money when they do.

According to a recent study by Oracle:

  • 72% of U.S. online adults belong to at least one loyalty program.
  • In a typical three-month period, loyalty program members spend $42.33 more with traditional retailers (those with physical stores) than shoppers not in a loyalty program.
  • The highest penetration — more than two-thirds of consumers in loyalty programs — occurs in high-frequency activity categories like grocery and drugstores.

Loyalty programs can be personalized based on individual customer buying habits, or you can send general alerts, discounts, and other rewards to participating members. Rewards programs can be implemented using direct mail, email, and mobile, so you can match the marketing channel to the preferences of your customers.

While many people associate loyalty programs with coupons and discounts, research has shown that over-emphasis on these incentives can actually decrease engagement. For example, among the affluent, offers that give exclusive access or elite status (such as an opportunity to purchase wine in their own personal batch) can be more effective.

When developing a loyalty program, think about what really motivates your customers. It may be different for different segments of your audience. Also consider matching marketing channels to customer preferences (direct mail, email, mobile). Like your rewards offers, it might be different for different segments of your audience.

You’ve worked hard to bring in those new customers. Now keep them sticking with you!


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