Customer Programs

Posted in Marketing and Strategy Terms, Total Reads: 307
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Definition: Customer Programs

Customer programs, also known as loyalty programs, are structured marketing efforts that reward, and so encourage loyal consumer behaviour for the benefit of the firm. Such programs offer a loyalty card, rewards card or points card to the member customer as tangible membership identification.


Following are examples of such cards:


Source: loyaltycards-india


In today’s competitive world, the need for customer programs is encompassed in the following points:

• To show customers that they are important and valued

• To encourage repeat purchases and loyalty

• To help the brand gather customer contact and demographic details

• It acts as a cheap advertising vehicle (for example, word-of-mouth advertising)


There are many ways in which brands can set up their customer programs. These include using a simple reward points system (like Reliance Fresh), using a tier system to reward initial loyalty and encourage further purchases (like Pantaloons), charging a fee for VIP benefits (like LinkedIn),


Customer programs can either act as a gift or as a curse. When executed well, they can turn customers into loyal brand advocates. However, when done wrong, they are a huge waste of time and resources, and become a burden for uninterested customers.

 

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