How a Loyalty Program can Boost Revenue

When you think of customer loyalty, you probably think of grocery rewards cards, or airline miles. Recently, however, a new breed of digital programs has emerged from the gamification movement, injecting new life into these tried and true programs. And they are effective. In fact, customer loyalty programs are often one of the simplest ways to boost your business’ revenue.

Forbes magazine found that acquiring new customers costs five times more than retaining existing ones. As a result, finding ways to keep current consumers coming back is much more cost effective than constantly marketing to new customers.

Whether your loyalty program consists of giving away occasional free items, providing deals and discounts on products, or offering reduced rates to customers who recommend your business to their family and friends, it can encourage your most faithful customers to come back on a regular basis.

According to Fast Company, most consumers prefer small repeated gains to one large victory. Consequently, small repeated gains that can be achieved over time (such as five percent off every purchase) create the most rewarding customer experiences. This is why loyalty programs that give away free miles, points, or credits are often so successful. According to statistics from Access Development, loyalty programs can increase a brand’s market share by as much as 20 percent.


As a result, businesses that are serious about growth should consider the merits of loyalty software. stated, “By appropriately adapting, planning and executing a loyalty program within its marketing mix, a company can capitalize on the dynamic marketplace of today’s consumer spending to reach the end goal in mind: retaining customers to drive sales.” Through using insights gained from current customer data, businesses can create rewarding loyalty programs that will keep their customers engaged.

Plus, a strong loyalty program not only encourages existing customers to return, but also motivates them to spend more money at your store. When customers believe that they are receiving a good deal and good service, they will reward your company with faithful business.

According to the ecommerce blog, “Loyalty programs are designed to encourage loyalty to a business, which in turn, results in increased revenue with continued patronage. Offering points can increase repeat shopper annual visits by up to 20 percent.” Starbucks stated that their loyalty program played a pivotal role in boosting profit by 26 percent and total revenue by 11 percent in 2013. Regardless of the way that you reward customers, creating a sought-after loyalty program can significantly boost your revenue.

Loyalty programs can also boost revenue through providing a simple way to keep in touch with existing customers. Companies can send personalized texts, emails, and recommendations that are tailored to an individual’s past purchases. Netflix uses this strategy by recommending movies and TV shows based on past titles that viewers have enjoyed. Starbucks does this by giving away free drinks on customers’ birthdays. A good loyalty program not only enables you to keep in touch with your customers, but also provides you with important information about how to market to them more effectively.


Since many people enjoy sharing the best deals and discounts that they come across, loyalty programs can also promote positive word-of-mouth advertising. Satisfied customers will often recommend a business to their family and friends, which is an excellent form of free advertising. Loyalty programs can also drive more traffic to your website, as potential customers visit the site to learn about your company and the services you provide.Access Development found, “84 percent of consumers say they are more likely to visit the website of a retailer with a loyalty program.” Positive word-of-mouth advertising and increased website traffic can both help boost revenue.

Small business owners who want to create a loyalty program should think about what they hope to achieve with it. Are you hoping to gain valuable information about customer needs and preferences? Are you seeking to boost revenue? Through creating a clear-cut list of goals, business owners can determine whether or not their new loyalty program is meeting expectations.

A good loyalty program will encourage current customers to shop at your business more frequently, increase revenue, provide valuable information about customer habits, and create positive word-of-mouth advertising opportunities. It really is too good of a deal to pass up.

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  1. Great article thanks Keith – I’ve been around consumer loyalty programs now for a good number of years and I’ve seen the positive effects that flow through to smaller, locally owned Retailers – the best loyalty program I have seen to date in terms of providing super value for both shoppers & retailers is the rapidly expanding cloud based program called beepxtra – it’s very inexpensive for retailers to join and negates them having to purchase their own loyalty systems, cards etc – it’s effectively like pay as you go advertising – learn more here:-

  2. i am new To article writer,
    i started wring on my website this is very helpful to me
    thanks, great post.

  3. These are reasons why you should use Loyalty programs:

    – Loyalty Rewards Make you Stand Out
    – Points/Miles Collectors Spend More money
    – Loyalty Programs Encourage Return Visits
    – The Land of Loyalty is Giant-Sized
    – Big Brands Bring you Big Loyalty

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