What is the value of a gift card and loyalty program?
April 22, 2015

Gift card and loyalty programs make a big difference to the bottom line of small businesses. Consumers are enrolling in a higher number of programs and deciding where they shop based on where they can use these benefits, according to Bond Brand Loyalty's April 2015 report. These programs make customers more likely to keep shopping with a certain brand.

However, retailers can't simply offer one of these programs and expect high engagement from their customer bases. The benefits need to be structured in a way that allows customers to easily earn and redeem them.

What goes into the most effective loyalty programs?
Starting a program isn't enough to encourage consumers to participate. While Bond Loyalty Brand's research pointed to the overarching trend of enrollment in more loyalty programs than ever before, consumers also have higher expectations. Although 34 percent of customers said they would not be loyal to a brand if they didn't belong to the program, many consumers viewed gift card and loyalty programs as extensions of retailers, thus influencing their relationships with the company.

However, programs need to be arranged according to customer preferences. It's common for retailers to send promotional emails to their subscribers on a daily basis, but customers want rewards they can use. The rewards should reflect shoppers' interests. In addition, many people prefer to browse items or make purchases with their mobile devices, and many programs do not enable this feature. Failing to accommodate user preferences may cause retailers to lose valuable sales, especially with loyalty programs driving purchases.

Make it personal
Although monetary rewards and discounts influence consumer behavior, they want more than this from retailers' loyalty programs. One of the things successful loyalty programs do is reward customers for taking surveys or engaging with the brand's website, according to CNBC. However, this is an underutilized aspect of many programs. Because gift card and loyalty programs are a significant part of consumers' relationships with a retailer, they want the brand to acknowledge them. Sending them rewards for their birthdays or based on recent purchases makes a difference.

All program communications need to be relevant. One of the survey participants' main complaints about loyalty programs was retailers often send irrelevant information, whether it's offers that aren't related to their interests or discounts on items they have already purchased.

A well-designed gift card and loyalty program can drive bottom line growth for small businesses. Loyal customers are more likely to return, but the rewards need to be compelling.

Nexus: G-WEBCD2