Customer loyalty programs often involve the tactic of giving away discounts based on repeat business or purchases. However, some merchants hesitate to offer discounts due to the perception that lowering prices “cheapens” a brand. After all, some brands proudly keep their prices high no matter what, and still have a loyal fan following – just look at Apple.

The truth is, many consumers make their place-of-purchase decisions based on promotions and sales. According to a survey conducted by Synqera, 93% of shoppers say they’re loyal to stores that have sales on products they frequently purchase.

While customer loyalty programs focus on offering discounts, when implemented correctly, they can also add much more value to your business image than you may have thought. Here’s how and why:

1. Loyalty programs give you a competitive advantage 

Today’s consumers are faced with more choices than ever. Whether it’s a coffee shop, nail salon, or a big box brand’s website, why should they visit your store? Having a dedicated loyalty program may be what it takes for someone to walk into your store.

A nurturing loyalty program with a variety of deals often leaves the impression that your business is willing to invest more in the customer experience. Fostering excellent customer experiences is key to differentiating yourself from the masses.

Digital loyalty programs that track behavior, such as visits and reward redemptions, give merchants more information about what customers really want. This allows merchants to improve their product, messaging, and marketing strategy – a prime competitive advantage.

2. Loyalty programs provide exclusivity 

Sales are accessible to everyone. Loyalty programs provide discounts for members only, and rewards are based on individual behavior such as number of visits and purchases. According to survey results by Mintel, more than one-third of Americans are drawn to loyalty programs due to the exclusive deals and coupons.

Many loyalty programs also offer tiered levels of loyalty, including “VIP” groups, which also projects a heightened image of quality and brand confidence.

3. Loyalty programs foster relationships

Loyalty programs foster relationships because they influence repeat business. The more a customer comes in, the more that business is able to connect with and get to know him/her. A barista is likely to remember a repeat customer’s name and favorite drink. A comic book store owner is likely to remember an avid fan’s favorite author. These interactions, coupled with added perks, leave a positive image of a store’s brand and values.

In a time of growing competition and thrifty consumers, a loyalty program will attract people back with offers and discounts. More importantly, it’ll show consumers you care and value their business, which is priceless.

Interested in more info regarding loyalty programs? Check out our post: 4 Important Things to Consider Before Investing in a Loyalty Program