Reasons for Loyalty Programs

12 Things Reward Programs can do for Businesses

There are many reasons why businesses embrace reward programs and invest so heavily in their implementation and maintenance.  The following is a compilation of the major functions of loyalty programs (with academic and business expert references).  (For a more detailed article, click here).

  1. “Keep customers from defecting(Nunes & Dréze, 2006)
  2. “Win greater share of wallet” (Nunes & Dréze, 2006)
  3. “Prompt customers to make additional purchases” (Nunes & Dréze, 2006)
  4. “Turn a profit” (Nunes & Dréze, 2006)
  5. “Yield insight into customer behavior and preferences(Nunes & Dréze, 2006)
  6. Yield insight into the effectiveness of a business’s marketing efforts (Stone & Field, 2001)
  7. Facilitate business communication with customers (Stone & Field, 2001)
  8. “To enable [a business] to provide special, differentiated service” to best customers (Stone & Field, 2001)
  9. “Enhance the overall value-proposition of the product or service” (Dowling & Uncles, 1997)
  10. Provide cross-branding recognition
  11. Tool for collective advertising and cross-business promotions  (Swaminathan & Reddy, 2000)
  12. Attract new customers

(Copyright PR Loyalty Solutions, 2012)

For the full article and explanations of each of these twelve things reward programs can do, click here.

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