How effective is your loyalty program?

I have a Border’s Reward Card, Blockbuster Rewards Card, points on my AMEX, mileage on my Master Card, and who-knows-what-other loyalty program cards in my wallet. I’m not alone. According to research from Colloguy, loyalty programs have increased from 1.3 billion to 1.8 billion since 2007, yet less than 44% of those programs are actively used. Guess I’m a statistic then. The research also said that “of an average total of 14.1 loyalty programs that each household has signed up for, only 6.2 of them are actually used.” The point is this – if you use a loyalty program with your customers, there must be a significant value-added piece to make them want to actually use it. It’s one thing to get a customer to sign up for the program, but if they’re not using it on a regular basis, you’re wasting your time and money. For instance, Borders regularly sends out emails, probably every two weeks or so, that includes a coupon for 30% off anything. I have four days to use it, it’s always a Thursday-Sunday and I must use it with my rewards card. Since I love books, I tend to buy more often then I normally would simply because the deal is a good one – it has great value to me. What kind of value can you offer? Ask your customers and vendors what would be valuable to them and then build your loyalty program based on their feedback.

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