Retail Loyalty Programs Benefit More than Just Customers

While each store creates its own unique customer loyalty program, they all have one thing in common –incentivizing purchasing behavior. Members get exclusive discounts or perks in exchange for being a loyal shopper. These programs are built on a simple philosophy – the more customers spend, the more perks they receive.  Essentially it pays to have loyal customers.

A few simple facts illustrate how popular this retail strategy is among brands and consumers:

  • The National Law Review found it costs five times more to acquire a new customer than keep a current one.
  • Forbes believes that current customers spend 67 percent more than new ones.
  • Shopify says that 66 percent of consumers report that they modify spending amounts in order to maximize points.
  • According to the 2016 Bond Loyalty Report, 73 percent of members are more likely to recommend brands with good loyalty programs.

Big box retailers, like Costco, attribute a lot their success to a refined “secret sauce” – building loyalty among members. Costco’s membership model mixed with improved renewal rates drives a lot of consistent traffic. Shoppers see firsthand the value they receive by being a member. Sephora’s approach – the Beauty Insider program – rewards consumers based on the amount they spend per calendar year. Their perks range from discounts, free products, exclusive access to class and tutorials.

Starbucks revolutionized the loyalty program technology by incorporating it into a user’s smartphone. Customers can pre-order drinks, have access to exclusive games, receive immediate discounts on flavor syrups and rack up point for free menu items. The app, or Gold Card, is straightforward to use and integrate your other applications on your phone. Similarly, Walgreens incorporated their loyalty program into their mobile app, which lets users refill prescriptions, order photos and make in-app purchases.

One of, if not the largest, loyalty programs is Amazon Prime with more than 100 million users enrolled in the program, according to CEO Jeff Bezos. Amazon Prime members spend 4.6 times more money on Amazon than non-Prime members do.  The success is all because the company listened to their customers’ most significant pain point – shipping costs.

Follow us on social media for the latest updates in B2B!

Image

Latest

data center design
Applied Digital’s Data Center Design for a 100 MW AI Factory Built from the Ground Up
July 2, 2025

AI workloads are redefining the limits of data center design and infrastructure. Legacy data centers, built for traditional co-location, cannot handle the density, thermal demands, or power dynamics of accelerated computing. The AI boom has upended the data center sector, forcing a rapid shift to liquid-cooled racks as facilities pivot from sub-10kW racks to…

Read More
Commerce media
A Look at the Rise of Commerce Media Networks: How Nift Helps Brands Own How Their Message Shows Up
July 2, 2025

As traditional digital advertising struggles to retain consumer trust, brands are exploring new, more authentic ways to connect with shoppers. Platforms like commerce media networks, which weave together commerce, content, and data, are emerging as powerful tools in this shift. Research from MG2 Advisory reveals that only about 37% of consumers feel brands genuinely…

Read More
Hospitality leadership
Heart-First Hospitality Leadership: How Saying ‘Yes’ Transforms Guest Experiences, Boosts Staff Morale, and Drives Business Results
July 2, 2025

As the hospitality industry emerges from years of pandemic-driven upheaval, hospitality leadership is evolving to meet new challenges. Leaders are looking for new ways to retain staff, elevate guest satisfaction, and drive revenue without burning out their teams. One trend gaining traction is the power of “Yes”: empowering employees to say yes more often,…

Read More
civic leadership
Mayor Gerard Hudspeth’s Civic Leadership Journey: What Politics Teaches About People
July 2, 2025

What does a mayor learn about human nature? In this episode of Professional Quotient: Conversations that Build Equity, host Jason Winningham sits down with Gerard Hudspeth, longtime mayor of Denton, Texas, and a respected figure in civic leadership. Drawing from his years in public service, Hudspeth explores how leading a city reveals the core…

Read More