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!



sustainability impact report
A Look Into MG2’s Sustainability Impact Report
April 22, 2024

When businesses invest in building strategies around a sustainability impact report, it’s a win-win for the environment, the company, and the community the business serves. The architecture and design industries face renewed pressure to innovate sustainably in an era marked by rapid environmental shifts and an escalating climate crisis. As businesses and individuals become […]

Read More
Oosto CEO, Avi Golan, on facial recognition technology
Facilities Housing Vulnerable Populations can Utilize Facial Recognition Technology to Detect and Locate
April 19, 2024

As technology demands evolve and see changes, the area of facial recognition technology can be of great use for vulnerable populations. As it stands, the integration of facial recognition technology and behavior analytics can enhance the safety and operational efficiency in sensitive environments like assisted living facilities.  Avi Golan, CEO at Oosto, and Dieter […]

Read More
Women's empowerment
Seizing the Narrative: The Transformative Impact of Storytelling on Women’s Empowerment
April 19, 2024

With gender equality becoming a significant global agenda, the narrative around women’s empowerment is more relevant than ever. Amid rising awareness and shifting societal norms, women are increasingly seeking avenues for self-expression and empowerment. A recent study by the Global Gender Gap Report highlights that while progress is being made, substantial efforts are still […]

Read More
V2G technology
Plug into the Future: Decoding V2G for Utility Applications
April 19, 2024

Brian Rudy from Verizon IoT and Melissa Chan of Fermata Energy explore the cutting-edge potential of vehicle-to-grid (V2G) technology at DISTRIBUTECH 2024. Their discussion highlights how this innovation transforms electric vehicles into dynamic energy storage units, capable of stabilizing the grid by storing and discharging power as needed. This technology represents a significant shift […]

Read More