The philosophy behind a customer loyalty program is simple: Repeat customers are rewarded and businesses increase sales.
For instance, My Starbucks Rewards, the coffee giant's customer-retention program, significantly contributes to the company’s record growth.
Starbucks claims that the program played a key role in its 26 percent rise in profit and 11 percent jump in total revenue in 2013’s second quarter fiscal results.
Best Buy also turned to customer loyalty after experiencing stagnant revenue growth year after year in its brick-and-mortar stores.
This strategy along with additional changes has helped the company’s stock more than doubled since early last year.
Manta’s and BIA/Kelsey’s joint report “Achieving Big Customer Loyalty in a Small Business World” reveals that for early adopters who already have a customer loyalty program in placed, 64 percent of them report it’s been been effective, meaning it makes more money than costs to maintain it.