Finally, loyalty programs have come a long way since the introduction of the simple punch card you handed out to your customers. Today you can manage your program through social media and smartphone apps, or a customer management system that allows you to track buyer behaviors and connect with customers through personalized emails or SMS marketing. The data you collect from your customer incentive program can also help you to cross promote or up sell additional products or services and create highly targeted and relevant marketing campaigns to further improve your business.
The purpose of a loyalty program is to generate incremental sales, retain customers, and encourage word of mouth referrals. To be truly effective, you need to know what your customers want, deliver a product or service that responds to those needs, and then reward your most loyal customers with incentives that have a perceived added value and recognize the importance of the customer to your business. Ultimately, loyalty programs are about building relationships, not just rewarding transactions.