Loyalty programs are a broad category that covers a variety of different ways a marketer can reward, retain and hopefully grow existing customers loyalty programs. It can range from point based programs if you're a consumer marketer based on what you purchase, it as well as when and how you purchase it; like a drugstore chain or a retailer. It also can be a point based program stemmed from how many products you buy from a manufacturer, and where you earn points by.
Signing up and registering your products with the manufacturer can prove the quantity of the product you intend to buy. Loyalty programs may not be points driven loyalty program, but can be defined by marketers as an email marketing platform to the customer base. A consumer or consumer database for a marketer, retail or a CPG (Consumer Packaged Goods) company, restaurant chain or hospitality chain might view the database of all the people who have bought from them or stated their properties as existing customers. Marketers as a result will spend a lot of time and effort analyzing their existing customer database and then leverage that information to market different promotions or content to those consumers. This is with the ideal outcome of getting them to continue staying or purchasing with them or increasing their frequency of spend or investment with that that market marketer. The loyalty programs tend to be measured in terms of incremental frequency and spend volume.
If an average customer per retailer spend $50 and typically shops three times a year a loyalty program that has in and of itself a lot of cost that the marketer has to invest. The ideal outcome is that the average customer in the loyalty program will actually spend $75 and visit the store and shop five times a year. So increasing the amount that the shopper spends when they shop and then increase the number of times that the consumer actually shops loyalty programs have been around forever. They obviously exist with airline companies and hotel companies and a lot of retailers they take the form of a loyalty card where consumers can get special pricing if they use their loyalty card like at the grocery store.
Ultimately loyalty programs are a variety of different tactics that all should achieve the goal of increasing your existing customer metrics. It is distinct from customer acquisition customer acquisition, as we’ve talked about in a prior podcast has focused on how do I get somebody that's never purchased for me to actually buy for me. And then once somebody is bought for me what are those programs that can help drive increased loyalty.
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