Advantages of loyalty programs

October 1, 2020
Loyalty programs can help any company, doesn't matter if you have only one branch or you are present in every major city. Loyalty systems are commonly used in petrol stations, coffee shops, retail shops etc.
Below we present a list of advantages of loyalty programs:

1. Loyal clients
Simply, your clients buy more often. Let's say you have a bakery. There are many bakeries in your town, but your place is different - your clients get not only a bread they want for breakfast. They get also rewards or discounts: for example after they bought 10 times they can get one bread for free. This additional bonus makes a big difference. At the moment of deciding where to buy a bread, where would you go? Of course the choice is simple: at the place that offers something additional!

2. Upsale
Upselling is a sales technique where a seller invites the customer to purchase more items, upgrades, or other add-ons to generate more revenue. It's easy with a loyalty program. In order to get more points, your clients may want to buy more, just to get a reward faster. Let's say your client buys one product and in total he acumulates 9 points. But in order to get a reward he needs 10 points, he needs 1 point more to get a coffee for free, so he buys something more just to get a reward. Easy!

3. Revenue increase
Overall your revenue increases. Your clients buy more often and they buy more. Additionally you can achive a certain buzz about your company - your clients may recommend your business, what means more new clients.

4. Get to know your clients better
Loyalty programs give you more information about your clients. You get their e-mails and phone numbers, which make it easy to inform them about new promotions. You also get more information about their preferences.

5. Whisper/Buzz marketing
If you offer good rewards your clients will advertise your business by themselves, by talking about it to their friends and family members. Offering a good reward for frequent buyers, even if it decrease siginificantly your markup, is a perfect technique. For a limited time you decrease your markup, but on the other hand you get a very cheap advertisement. You can limit your rewards to be available only for a certain period of time, so that it doesn't harm your revenue.