How to create a retail experience that allows us to compete against Amazon
Half Price Books shows the way in instituting loyalty

How to use a loyalty program to create customer-investors in our businesses

Loyalty programs are frequently misunderstood. Used properly, they allow both the customers and the business owner to realize benefits from investing in a long-term relationship.  

  1. Get customer profiles into a data repository. is free and as easy as a spreadsheet PLUS much less vulnerable to user error. Or get a real CRM... 
  2. Find a way to connect customer profiles to behavior... Credit card I.D.? Loyalty card? Phone number? Be sure that one customer doesn't end up with multiple accounts which will make that customer seem less important. 
  3. Allow customers to build up capital in the account. Purchases are a start, but consider social media engagement and referrals, too. 
  4. Create a program that allows your customer-investors to get some ROI. Make it scale... more investment = more return. 
  5. Learn, learn, improve, raising our own return in investment. Contributor:"What's the Point?" Guidelines to Customer Loyalty Programs, 2019-Apr-12 by Ashish Merchant

So why do so many brands use a points-based program?  One simple answer is to raise the value of the engagement with every transaction.  A flat discount (often advocated to extend “instant gratification”) may motivate customers to use multiple cards, not allowing the brand to distinguish between multiple transactions by the same users and multiple users.  However, reward points create an incentive for the customer to use the same card (or mobile phone number) repeatedly. Brands also build in a system to create stronger incentives for frequent users or high-value clients by way of program tiers which create higher levels of benefits.  This raises the stakes as the relationship progresses (the total value of accumulated rewards points is far higher at the end of a year, making the card perceived to be more valuable).