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Integrated Marketing Association

Loyalty Marketing

Loyalty marketing refers to a business’ strategic use of rewards to earn and maintain customer support over a long period. In this mutually beneficial marketing strategy, brands use captured data to retain existing customer business while customers receive incentives to continue purchasing the business’ products or services.

Grocery stores, apparel stores, and service providers often offer loyalty programs. Most offer a loyalty or rewards card at the point of acquisition, giving customers the opportunity to begin earning an incentive with their first purchase. Other loyalty marketing strategies offer incentives for referrals, early access to new products, and increasingly more valuable rewards. Like some freebie marketing offers, loyalty programs may not cost a consumer anything initially. To build points and earn rewards, however, consumers must continue to purchase goods and services from particular brands.

Loyalty marketing describes the brand’s objective to create a personalized and long-lasting customer relationship. Rewards programs are tools or tactics used within loyalty marketing strategies to develop relationships. While brands can give consumers a loyalty card upon their first purchase, they may not earn customer loyalty at that point. For a loyalty marketing program to work, brands need to deliver exceptional products and services, transparent terms, and straightforward benefits. Without a solid customer experience, a customer has no incentive to use a rewards program.

One of the most straightforward benefits of loyalty marketing activities is customer retention over time. Retaining existing customers is often much more lucrative than constantly acquiring new customers.

The widely-used marketing strategy provides some hidden benefits, as well. Marketers use collected customer information and purchase histories to drive other value-driven marketing activities. For instance, if a customer frequently buys a certain type of shampoo from a retail store, the retailer may offer targeted coupons to increase the dollar amount of future purchases. As a marketing strategy, loyalty programs facilitate customer acquisition, individual purchase amounts, and retention activities.

IMA features several loyalty marketing solutions on Martec Showcase

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