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eMoney News

Why are loyalty schemes beneficial for businesses?
19 Apr 2011

There are a number of reasons why launching a loyalty scheme could be beneficial to businesses, it has been suggested.

According to Equity Master, it is "much cheaper to retain an old customer than it is to find a new one".

Therefore, by introducing a loyalty programme they can keep consumers coming back and spending their money without a great deal of effort.

The idea is also beneficial because it often allows stores to acquire information about people's spending habits, which makes it easier for them to market certain products and identify with the end user, the news provider continued.

"It helps in building an emotional connect with the buyers," it added, noting that the bulk of a company's sales are often brought in by a relatively small group of people.

These comments echo those recently made by John Stanley in an article for Top Ten Wholesale, as he said 80 per cent of a retailer's profit comes from the top 20 per cent of its customers.