Why Loyalty Programs Are Essential for Every Retailer
The idea behind customer loyalty programs: Engage and reward your repeat customers to boost their experience with your brand, and generate more revenue. Although the strategy is simple, loyalty programs can produce powerful results. The latest loyalty landscape numbers reveal that a well-executed loyalty program delivers more profitable customer relationships than any other form of marketing, for businesses of all sizes.
KEY BENEFITS:
Why Loyalty Programs Make All the Difference
They help attract more customers:
Loyalty programs influence purchasing behavior—a recent survey by eMarketer found that 79% of consumers said they were more likely to choose a retailer that offered a loyalty program over one that didn’t. Implementing a loyalty solution that swiftly captures customer information can significantly expand your loyal customer base, helping you foster lasting loyalty and drive repeat purchases.
Engaged customers spend more:
Loyalty programs enhance customer engagement while encouraging repeat purchases and higher spending. According to BIA Advisory, repeat customers spend 67% more on average than those new to your business. A robust loyalty solution enables you to connect with customers across multiple sales channels—including in-store, eCommerce, mobile, and event sales—while engaging them through in-store promotions, mobile texts and push notifications, email marketing, and online/social media campaigns.
Increased customer understanding:
Customer data empowers businesses to create loyalty programs tailored to individual purchase preferences. A data-driven loyalty solution automatically gathers insights from customer interactions across multiple channels, providing instant access to the information needed to launch and refine a successful program effortlessly.
Increase referrals:
79% of customers say they’re more likely to recommend brands with good loyalty programs. In today’s world of digital native consumers, businesses are increasingly concerned about what their customers say about them. Loyalty programs are a great way to increase positive reviews and referrals by converting customers into word-of-mouth advocates.
Outshine the competition:
Competing with big brands resources you can only dream of can be tough. However, a strong customer loyalty program allows small and medium-sized businesses to stand out with a personal touch and remain competitive. Personalized engagement can significantly impact specialty and independent retailers’ bottom line.
Customer loyalty programs benefit businesses of all sizes by boosting sales and fostering long-term, profitable relationships with customers. Innovative loyalty technology, like bLoyal, makes launching a program that delivers real results easier and more affordable than ever.
Real-Life Examples of Loyalty Program Success
In 2024, Starbucks continued to credit its loyalty program as a key factor driving its success, with membership in the U.S. surpassing 30 million, reflecting strong year-over-year growth. Similarly, Best Buy has further evolved its loyalty program to enhance its competitive edge against online behemoths like Amazon and eBay. This ongoing strategy has not only helped strengthen customer retention but also contributed to a significant rebound in their stock price, which saw a notable increase in 2024, reinforcing the power of well-executed loyalty programs in today’s retail landscape.
- In Q1 2024, Starbucks Rewards had 34.3 million active members in the U.S., a record high.
- In 2024, active membership in the U.S. increased by 13%.
- Starbucks loyalty members spend three times more than non-members and visit more often.
- Starbucks attributes over 40% of its total sales to the rewards program.
- Members receive extra treats like extra shots of espresso, selected syrups, and whipped cream.
- Members receive a free drink on their birthday.
- The app includes a member dashboard, click-and-collect orders, a digital Starbucks Card, and push notifications.
Small and medium-sized businesses also profit from implementing loyalty programs. An independent crafts retailer in Washington state added a customer-loyalty program last year to improve customer insight, engagement, and sales. Store employees signed up more than 20,000 loyalty members since the bLoyal loyalty tracking and rewards system was installed. The loyalty program consistently delivers impressive results. With bLoyal, they can easily identify their most valuable shoppers and inform them about new merchandise, exclusive sales events, and free classes.
Julio de Villasante, bLoyal COO, says:
We’ve seen impressive loyalty program results across every size of retailer, from small to enterprise level retailers. Program members often spend between 20% to 50% more per transaction, buy more frequently, and remain loyal customers for a longer period, which maximizes customer lifetime value.
