Most people think of loyalty programs as an airline that gives miles to frequent fliers, a hotel that gives points toward a stay or a restaurant that offers a punch card incentive. While these may be called loyalty programs, I’ll argue that they are actually marketing programs disguised as loyalty programs. And while I don’t have a problem with this concept, we need to have a clear understanding of the differences between loyalty and marketing.Some customers choose to be loyal to the airline, hotel, restaurant, etc., because of points more than anything else. Human nature kicks in and the “member” of the loyalty program becomes fixated on earning points. That’s why passengers will fly an airline with which they have the most points, even if it means paying more for a ticket. The bottom line is that these customer loyalty programs do work to drive sales and create repeat customers.
New customers don’t generate nearly the same revenue as repeat customers.In fact, repeat customers spend 70 % more than new customer.But turning new customers into repeat customers doesn’t happen automatically, which is why you should consider a customer loyalty program.With the right customer loyalty program, your customers will keep coming back to purchase from you, and perhaps turn into brand loyalists.