Loyalty Programs Work

The current Facebook data scandal is an excellent opportunity for customers to rethink their technological user behaviors. And that is a good thing. But this discussion also shows how valuable customer data really is for companies.

In my opinion, loyalty programs such as plastic cards, for example, are a great way to reward customers for their loyalty and at the same time – as a company – learn more about them. But let’s be upfront about one thing: of course, the points, miles or stamps have mostly been invented to get to know customers holistically and so make them more transparent.

Consumer behavior is analyzed in the form of data which is then used by the marketing departments. Clusters are formed and algorithms developed to balance customer promotions and communicate more effectively. For that, large amounts of data are being collected – and the possibilities for companies to make good use of this data are gigantic. But the advantages of this transparency are ever increasing for customers, too. We all have heard stories of free flights in business class or the hotel suite upgrade. Loyalty can pay off for customers, too – literally.

Many sports retailers and brands reward customers with bonus points, discounts and other goodies for their loyalty. From what I can see, however, retailers still don’t make use of the full potential. My message for them: Focus and pay more attention in this area – it has a significant, yet unrealized turnover potential for you to tap in. But it’s not only the direct dollar that makes those loyalty programs exiting. They create relations with customers – and those are priceless.

This article first appeared on SAZsport