Shelf health image

[infographic] Loyalty Programs: How Adding Value Can Add Profit

Many retailers have loyalty programs to thank and incentivize their customers. Top retailers really got the memo because 55% have loyalty programs. They come in a few different forms, such as a physical card, an account linked to personal information to use online or in store, and giving a percentage of the purchase price back. Loyalty programs are an effective way to get shoppers to spend more and keep coming back because they add value to the shopping experience.

About 95% of people who use loyalty programs at stores reported that they were likely to continue using it. It simply makes sense to sweeten the deal to get past customers to purchase again because it costs retailers up to 10 times as much to acquire a new customer, compared to keeping an existing customer. Also, these returning customers spend 67% more than new customers on average.

Here are some pointers from the loyalty program hall of fame:

  • Have “no purchase necessary” gifts to drive foot and web traffic
  • Link the reward account to a phone number or email address to make it easy to use in store and online
  • Provide rewards that mimic previous buying behavior
  • Have a tiered system in order to drives sales as shoppers aim to get the most exclusive rewards
  • Differentiate your rewards so that other retailers can’t steal customers with copycat programs

This sounds great for shoppers, but don’t worry, retailers aren’t getting the short end of the stick here. They benefit too because they receive invaluable data that can be used to target customers with the most relevant rewards.

Implementing a loyalty program can be a great way to improve margins and customer loyalty, but don’t forget – first you’ll need a solid pricing strategy to ensure that shoppers make their first purchase.

Check out our infographic below:


Arie Shpanya

Arie is the former COO, Executive Chairman, and Co-Founder of Wiser, a dynamic pricing and merchandising engine for online retailers and brands. He has extensive experience in business development with a focus on eCommerce (eBay and Amazon), and is a guest blogger on Econsultancy, VentureBeat, and more.

Need better data to inform your decisions?

Schedule a Consultation