#Loyalty cards – who benefits?

In Customer Experience, Data & Analytics, Loyalty & CRM, Marketing and Sales by melissa

loyalty cardsLoyalty cards let customers get rewarded for shopping with specific retailers over and over again. But, what about retailers? Are they benefiting from their own loyalty programs?

Byron Sharp, Prof. of Marketing Science at the University of South Australia is questioning the benefits supermarkets get from having loyalty programs.

He feels that neither customers nor supermarkets gain much when shopping decision is greatly influenced by store location and parking availability.

He says that people who join the loyalty programs are the people who already come into your store a lot. It's these people that have time to sign up and will get to realise the benefits from collecting points in exchange for rewards. These people are also unlikely to join loyalty programs for stores they hardly visit, especially as they already have established shopping patterns.

Another academic's opinion is that retailers do benefit from loyalty programs in the long run – it gives retailers customer data. It lets retailers monitor different consumer groups shopping patterns over time and capitalise on that with different in-store activities to influence purchasing behaviours.

For customers, a lot like the instant rewards, such as the fuel vouchers. Being able to shop and then get a discount on their re-fuel on their way home. People know that the bigger rewards take ages to get to and so retailers encouraging customers to make a bigger shop in one week for an immediate reward works.

(For the full article by ABC News, click here.)

For more ideas and strategies on how you can improve customer loyalty, check out Loyalty World Australia 2012.