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Winning the Loyalty Game


According to Frederick D. Reiccheld, companies can boost profits by almost 100% by retaining just 5% more of their customers. Retailers are cognizant that a significantly greater amount of time and money is needed to acquire new customers than to keep the old ones. In fact, 61% of retailers cite customer retention as their greatest obstacle. Because of the rapid advancement of technology and the growing competitiveness among loyalty programs, winning the loyalty game is no longer just a matter of incentivizing customers.

The new challenge for retailers is recognizing how the digital world has changed the way customers engage with loyalty programs and adapting those programs accordingly.

Researching data surrounding the success of different CRM structures is an essential step as retailers develop a model that fits their strategy and target audience. Over half of shoppers report that an item being on sale influences them most when making a purchase. As such, it’s no surprise that discount loyalty programs are used the most frequently at 41% followed up by fixed reward programs (39%), lifestyle programs (37%), points-based programs (34%), status (31%), and pay to play (29%).

Most retailers would be surprised to find that only 5.5% of shoppers report that receiving extra points influence them most when making a purchase. Points-based programs are simple to implement from a retailer perspective but difficult to keep track of from a customer perspective. Customers tend to struggle with keeping track of their points status and end up falling away due to information overload. Providing a way to for customers to receive program status information via mobile device is an effective method to increase engagement while adapting to the digital world.  In fact, 73% of smartphone/tablet users would prefer to use their mobile device to interact with loyalty programs according to the Maritz Loyalty Report.


Mobile is no longer an untapped resource when it comes to loyalty programs; however, leveraging data to best utilize that resource is not well utilized by retailers. For example, a Key Ring client analyzed their CRM program’s active usage data and determined that their customers tend to use loyalty cards on Saturday afternoons. By sending a push notification 24 hours before this prime shopping period, the retailer was able to increase loyalty transactions increased by 113%.

By developing a multi-channel approach which includes the use of mobile technology, retailers can maximize CRM programs. Truly loyal customers generate between 55-70% of retail sales. A successful CRM program will retain these customers, and, inevitably, boost profits. To learn more about how to make your loyalty program more effective, check out our infographic.

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