Customer Loyalty Programs – Are They Working for You?

As customer loyalty programs proliferate by the hour, is it time to ask, “do they really work?” For highly visible consumer brands, it seems one cannot operate without some sort of reward system targeting those customers for their loyalty towards the brand. The prime benefit to the issuing company of course is a pile of Big Data about those consumers. Let’s take a look.


  • Customer retention: Loyalty programs are powerful incentives with the potential of encouraging customers experiment on new products and even return to a dealer’s premises for more. Customer retention is an incredible advantage to any dealer. Maintaining reliable customers in the long-term is considerably cheaper than spending a lot of money to attract new customers.
  • Profit boost: Retaining loyal customers has a positive effect on the profitability of the business by maintaining a steady flow of revenue.
  • Enhanced competitiveness: In business, competition is a factor that must always be considered and having an effective customer loyalty program is a milestone to leaving the competitors to dust.


The customer loyalty programs face a couple of drawbacks.

  • Lack of uniqueness: Today, almost every company has a loyalty program and therefore you can no longer expect to create extraordinary excitement among your customers by introducing a mature marketing technique.
  • Cluttered consumers: Not many people want to clutter their wallets with paper punch-cards or carry dozens of plastic rewards cards on their keychains.
  • The initial expense of introducing them as well ensuring that they are sustainable: Almost every program is based on giving discounts to customers, and the slightest miscalculation can bring your business to its knees through losses. Notice how airlines have placed numerous blackouts and other restrictions on their mileage programs? Those seats are getting top dollar and the fewer they discount the more eat revenue they generate.

Is tracking best loyalty programs easy?

Tracking dealers with the best loyalty programs have become much easier as most people have adopted technology and internet use. Several apps have been developed to specifically track loyalty programs for the customers.  Such sites update the customers on any changes that take place affecting the loyalty programs they have subscribed to. The sites have a fascinating feature where users review various programs and one can judge which company has the best offer.

Most customers are satisfied with loyalty programs because they bring a lot of incentives. HBS Dealer recently polled its readers as to the type of rewards most dealers offer. The rewards have the potential of growing either linearly and in some cases exponentially. The growth depends on the number of purchases the customer makes or the value of the product. The customers view the loyalty programs as an act of goodwill from the dealer further increasing the satisfaction.

Belco Forest Products works with distributors and dealers on a number of programs to drive new clients through the door. Feel free to call us for more information at 360.426.8900.