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Data for today’s episode is provided by Mercator Advisory Group’s report – Gamification and Other Strategies for Merchants to Enhance Customer Loyalty
- In-house: The most common loyalty model, keeps focus exclusive & prevents conflicts with other brands. Expensive for small brands
- Multi-brand: Highly popular with chains that operate under multiple locations and different names. Also 100% controlled by the operator
- Co-Brand Card; Typically used by retail, airline & hotel, partnered with a card issuer. The drawback is that card can be used anywhere – not just at a merchant location
- Private-Label Card: Can only be used at a single merchant and are typically managed by a 3rd party who handle the credit application process and management
- Coalition: Popular in the UK and Canada, but largely unsuccessful in the US. Coalitions of merchants combine their loyalty schemes
- Cross-Brand: Two or more brands offer services to each other’s customers. Airline and hotel is the classic combo, but on-demand businesses have entered this model recently
About this report
Most studies find that merchants spend at least five times more to gain a new customer than to keep an existing one. Further, higher customer retention typically leads to greater business profits. A new research report from Mercator Advisory Group, Gamification and Other Strategies for Merchants to Enhance Customer Loyalty, assesses different types of customer loyalty programs across various retail verticals and discusses key success factors for merchants to act upon.
“Getting shoppers to keep coming back is critical for both brick-and-mortar stores and e-commerce in the retail world. Consumers can choose among a variety of competing brands, and engaging loyalty programs are often a differentiating factor encouraging continued patronage,” commented Raymond Pucci, Director of Merchant Services at Mercator Advisory Group, author of this report.
