The data generated by a loyalty scheme can also be used to improve your bottom line. Loyalty programmes put the spotlight on customer behaviour. They can show you your best clients - and highlight your worst.
It can be more profitable to lose bad customers than to gain new ones. While your best customers may be bringing in the lion's share of your profit, your worst customers - bargain-hunters that spend little and only buy discounted goods - can actually cost you money. Your loyalty scheme can significantly improve this scenario by rewarding customers and actively dissuading the worst.
Loyalty schemes can also be used to win back lapsed customers. These customers are much easier to win over than cold prospects. They know you and you know them, their buying history and where and how to reach them.
The data generated by a loyalty scheme can offer other valuable insights. It can highlight defection patterns and can also help you improve your product range and stock selection. Knowing what your best customers frequently buy helps you choose which lines to stock - and which lines to expand.