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Loyalty Programs and the Benefit to Your Business

Published Mar 09, 2017 Business
Loyalty Programs and the Benefit to Your Business
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“Quick Summary” Over the last several years loyalty programs have really started to soar, not only in retail stores, but also in restaurants. It is pretty rare these days to walk into a business that doesn’t have a loyalty program. These can vary greatly from point systems to tier system rewards, and some companies offer a VIP program where they charge the customer an upfront fee for the benefits.

While we know that many business are utilizing the loyalty program, does it actually help with customer retention? These loyalty programs can present benefits to both the business and the consumer. It is commonly known that it is more expensive to attract new customers to your business than to retain current ones. The business benefits by continuing to bring their existing customers back through their doors and the customer benefits by receiving a discount on services. According to an article in the International Journal of Business and Social Science (vol. 6, No. 8(1); August 2015), “Relationship marketing aims to create life time customers because when customers have a relationship with a company, they are ready to forget any other competitors offer. Customers are motivated to do that because it gives them a greater efficiency in decision making, reduces the information processing, achieves a greater cognitive consistency in decisions, and reduces the perceived risks associated with future decisions.”

Simply speaking, this means customers are motivated to go back to a business they have had a good experience at because it eliminates the tough decision of where to go for a particular product. A goodloyalty program reinforces the consumer purchasing behavior with positive reinforcement. An example of positive reinforcement is a structured loyalty program that provides incentives or rewards for their business. A common loyalty program seen in restaurants is the points system. With this type of program the customer enjoys benefits and special offers like free appetizers, desserts and more.

With so many customers it could easily become difficult to keep track of your loyalty program and the customers signed up for it. A good POS system will do this hard work for you. The Ovvi POS Restaurant software has built-in loyalty programs to help your business retain customers with a great loyalty program.

Ovvi POS Inc. is the leading POS software development company with the mission to advance the POS industry through extensive customer and user experience research, coupled with innovative technology to serve the needs of retail and restaurant businesses. Schedule your Restaurant POS Software demo today.