Customer loyalty is fundamental to any business strategy. Research shows that loyalty programs impact purchasing decisions of approximately 80 percent of participating consumers. Especially in industries like retail and travel & hospitality, loyalty programs can help combat the commoditization that is occurring on many levels, with differentiation based on location, selection or price being increasingly difficult to achieve.
In addition to being a good way to stand out from an ever-growing crowd, loyalty programs help implement a more effective continuum of customer engagement. Along with other tools such as price optimization, customer analytics and multichannel campaign management, retailers and other businesses can better understand and best serve the needs of their customers by engaging them in a conversation, listening, finding out what they want, and getting it for them.
A successful loyalty technology solution must work in conjunction with other systems to provide functionality for customer intelligence and effective marketing communication, so that the business can direct the right marketing effort at the right customers at the right time. Along with BI and analytics tools for effective segmentation, this will require a powerful campaign management platform capable of reaching out to multiple audiences via a variety of channels (both mature and new, e.g. social media) and capturing customer feedback, providing the marketer with a comprehensive view of promotion and response history.