To maintain profitability and increase sales, online merchants and traditional merchants must come up with inventive methods of increasing repeat shoppers. One method of increasing repeat customers businesses are taking advantage of is implementing loyalty programs. A loyalty program is based on the business concept that profitability is increased when one maintains a loyal customer base. It not only allows businesses to maintain customers, but attract new customers. The most beneficial reward program is one that shows customers they will be rewarded if they increase their spending at the business.

The following list outlines how loyalty programs increase repeat shoppers:

•Loyalty programs such as gift cards, buy so many items and get one free cards, or a discount on the next item coupon, encourages customers to return to the retailer and make more purchases. For instance, if a customer has to buy 10 bags of dog food to get one bag free, the business will make more money on selling the 10 bags than losing money on a free bag. This is true for discounts and cashback loyalty programs. Frequent-purchase programs and points programs are examples of loyalty programs.

•Word of mouth is a great free method of advertising. A customer who is participating in a loyalty pogram is likely to bring a friend to the business who will want to join the program. This is especially true for free coffee loyalty programs. Whether you offer cash back, or reward points, or discounts on items, giving the customer what they most value will lead to an increase in repeat purchases.

•More customers are now looking for free shipping when they order online. Offering a loyalty program where the customer gets free shipping is a great way to increase repeat purchases.

•A loyalty program shows the customer that you appreciate and value their patronage. Customers enjoy receiving rewards and are more likely to return to the business. Loyalty will be established and a large loyal customer bases will grow. The money a company spends out on a reward program is much less than the profits that will be obtained. There will be a great return on their investment.

To have a successful loyalty program, one must have a clear strategy, a targeted customer demographic base, a proven method of tracking the results of the program, a method that will result in acquiring loyal customers, a way of gathering customer data to be analyzed for marketing purposes, and loyalty rewards that customers want.

More businesses are establishing loyalty programs because the effectiveness of these programs is well-documented. Businesses have found that it is more profitable to keep existing customers than to constantly look for ways to attract new customers. Loyalty programs motivate consumers to spend more money more often. In these difficult times it makes sense to take advantage of every marketing tool available. Implementing and managing a successful loyalty program not only increases repeat customers, but allows for building a brand and loyal customer base.