Loyalty program

Loyalty programs are activities, usually in the retail industry, aimed at engaging customers and encouraging them to make repeat purchases. Generally, this incentive consists of offering benefits or gifts. Not infrequently, loyalty programs include savings elements and rewards for frequent purchases. The effect of loyalty programs is mainly psychological, since the customer pays for the benefit or gift obtained himself.

Savings programs

The best-known manifestation of a loyalty program is the savings program. Here the customer receives stamps or points that can be accumulated. The number of points or stamps to be received per purchase depends on the total purchase amount. The accumulated loyalty points or full loyalty cards can be redeemed for gifts, exclusive discounts or cash. Savings programs are widely used by supermarkets and gas stations, among others.

Whereas savings programs used to usually require sticking stamps, today savings cards and stamp books have mostly given way to computerized savings cards.

A popular savings program created jointly by several Dutch companies is Air Miles. This was once introduced in cooperation with KLM to save for air travel. In practice, redeeming Airmiles against gifts and discounts at participating companies proved to be more successful.

Certain product groups, such as cigarettes, alcoholic beverages and drugs, are legally excluded from savings programs and other loyalty systems.

Shopping Stamps

A separate category of savings programs are those based on purchase stamps. At various retailers, the total of the receipt entitles customers to purchase stamps. Customers can redeem full savings cards for the total value of the pasted stamps, plus a certain percentage of interest. Often the interest rate is higher than could be obtained in a savings account. Sometimes this interest rate increases even further as more cards are redeemed at once.

Benefit programs

Many companies give regular customers benefits. Some retail chains have created special benefit programs and tiers for this purpose.

Passengers who frequently fly the same airline are rewarded within a frequent flyer program with accumulated discounts and special privileges, such as priority check-in and seat assignment and access to VIP lounges.

Customers of supermarket chain Albert Heijn can use their Bonus card to take advantage of weekly changing offers and automatically earn Air Miles. The card helps the retailer analyze customer buying behavior. Loyal customers receive exclusive offers tailored to their previous purchases.

Premiums

In addition to the regular loyalty systems, many retailers use promotional campaigns in which premiums take center stage. Here, customers receive a small gift with a certain amount of groceries. This often involves a series of different items that can be collected.

Examples of such loyalty promotions include soccer cleats, Jumbo cheering suits and Albert Heijn's Wuppies and vegetable gardens. Not infrequently, the promotions are themed around a popular event such as the World Cup.