LOYALTY PROGRAM INCREASES REVENUE
Loyalty programs, when run correctly, have proven to be a game changer for organizations. It helps them boost revenue because they have created a loyal customer base. How do loyalty programs do this? What is their secret sauce?
Loyalty programs are able to produce increased revenue due to the fact that people purchase more, they become advocates for the brand and there is potential for up-selling.

Increased purchases
Loyal customers spend more over time as they become more comfortable with a brand. The first time they visit they may purchase one item because they are just getting to know you. But over time their cost per transaction goes up because they may try more of your products or services. The key for your business is not the initial transaction but the Lifetime value of the customer to your business. Increasing their time with you through rewards drives your revenue up over time.
Advocates for the Brand
Loyal customers are your best marketers! They will not keep the good news of your product to themselves. If you are able to provide them a great product and combine that with a loyalty program that engages them, they will discuss your business all day. This will lead to an increase in sales for you because new customers will come in just on the strength of their friend’s recommendation.Â
Upselling
Loyal customers often present an opportunity for upselling and cross-selling because of the trust that they have built with the brand. This means they are more receptive to recommendations for premium products or additional services that complement their previous purchases. Trust is not gained overnight but is a result of consistent positive experiences. Once established, it becomes easier for businesses to introduce loyal customers to new offerings.

A dormant loyalty program won’t produce these results. It won’t produce engaged customers that seek out your business again and again. An ignored loyalty program won’t provide you the opportunity to upsell your customers.
However a small investment in a well run program, will allow you to create loyal customers that are willing to speak your praises and help you grow your business.
Comments