Loyalty Programme Definition

Loyalty programmes are a way for businesses to identify their best customers and conduct customer retention and acquisition strategies. Loyalty programmes can take many forms from travel membership, frequent flier programmes, loyalty auction programmes, cash back rewards, value added benefits and online shopping portals. Businesses that maximize the effectiveness of a loyalty programme will benefit from an ongoing revenue stream and from this can branch into affiliate marketing and affiliate reward programmes, which have the same aim as loyalty programmes-to build long term customer relationships. Global online merchants can be sourced and affiliate marketing conducted to get the most out of a loyalty or reward programme. Partnership marketing such as a loyalty programme has proven effective in the travel, financial, hotel and airline sectors.

Loyalty programmes traditionally come from the retail sector and are featured in many retail marketing strategies. Often cards are distributed with a customer loyalty programmes similar to that of a credit card on which you redeem points and exchange them for value added, and often tailored benefits. From the card issued with the Loyalty programme, customer insight can be gained from analyzing the data acquisition and this can assist in customer behavior analysis.

Proven revenue streams that work well as a loyalty programme such as redeeming mileage points can increase revenue potential and create brand differentiation. Cash back reward programmes are an extension on this and can be used in conjunction with existing loyalty programmes. Customer loyalty marketing is an important part of the global brand strategy for a loyalty programme or cash back reward programme. New and recurring revenue can be created for the business and affiliate marketing partners through transaction commission for both parties. Loyalty programmes or loyalty rewards can create ancillary revenue (or incremental revenue as it is referred to in the financial sector). Increasing member interaction can not only reduce redemption liability but also provide sustainable revenue.

There have been substantial developments in marketing technology and promotional platforms so loyalty programmes can offer easily implementable marketing solutions with tiered and flexible benefits. Find out more about ancillary revenue programmes offered by Collinson Latitude

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