Modern loyalty programs have a foundation in luxury services, beginning with American Airlines rolling out their frequent flier program in 1981–the first of its kind, and the birth of modern premium marketing. Since its inception, their loyalty program has grown to over 50 million members with every other airline following their lead.
Many brands have fallen behind the times because they are under the impression that discounting their products will devalue their products. However, loyalty programs work for high end brands precisely because their main focus is on providing an exclusive service to their elite clientele. Here is a brief overview of high-end brands that have embraced loyalty in a big way.
Every small business aspires to grow, maintain loyal customers and gain new ones. One way to do this is through a successful loyalty program.
According to statistics by KISSmetrics, customer acquisition costs 7 times more than customer retention. Therefore, it would do you good to develop programs to encourage current customers to keep coming back.
Data from the National Retail Federation’s Top 100 retailers chart states that among those on the list, 51% have some sort of program. 73% of these programs are points-based while 24% of these are credit card points.
It also points out that retailers with loyalty programs fare better in terms of earnings. In 2014, retailers without loyalty programs earned $496 billion in revenue or an average of $9.9 billion each while those with loyalty programs earned a total revenue of $1 trillion or an average of $20 billion each.
Even if yours is only a small business at this point, you can still gain big benefits from rewards programs. To give you some ideas on the types of programs you can develop, here are some successful ones you can use as your pegs.