Merchant Card Service - Giftcards - Loyalty Cards

Loyalty Cards

According to an article by Colloquy Magazine, " A loyalty program is one that seeks to identify, maintain and increase the yield from customers through long-term, interactive, value-added relationships. "

In this competitive business climate, many merchants are looking for more innovative ways to increase customer loyalty. This is one of the hottest segments of the merchant services industry. There are thousands of loyalty programs in the marketplace. The estimated loyalty industry is at $5 billion and rising. Everywhere companies are implementing and advertising customer loyalty programs. Loyalty programs are now available at your local carwash, auto repair, video store, retailer and restaurant. Companies realize that their most precious asset is their existing customer base. Merchants are acutely aware that it costs much more to acquire a new customer than to market to an existing customer. By utilizing a loyalty program merchants can gain a competitive advantage by analyzing demographic data and customer buying patterns.

Loyalty programs can be customized, but for the most part they award customers for shopping based upon number of visits or dollars spent. For instance a company may want to offer 20% discount on a customer's 10th visit. Or give away a free movie rental on the 20th rental. The potential is unlimited.

Loyalty programs offer many advantages to merchants:

• Increase advertising opportunities
• Increase sales
• Establish stronger relationships
• Increase customer retention
• Increase customer base from referrals and added benefits
• Increase reporting features
• Data mining of customer shopping and purchasing patterns

Many of the new cards will be hybrid cards or multi-application cards. This means they may provide both gift and loyalty capabilities on a single card. Loyalty applications are another excellent way to get our foot in the door of a potential customer. Merchants are much more willing to talk to someone about an opportunity to increase their traffic, profit and customer retention, than saving money on credit card processing. More information on the loyalty industry can be found at: www.colloquy.com/defualt.asp