Repeat customers reportedly spend 10 times more than new ones. Once you have them, what you cannot do is rock the boat. It is something that we discussed here. A retailer set up a discount voucher system, it did not work now they are frightened to change it.
Once you establish a loyalty program it is extremely dangerous to make any changes. So you need to cross your t's, dot your i's and check how its going to work carefully before making one.
This clearly is not what Woolworth appears to have done when they made their recent changes in their loyalty card program in October. Then Woolworths announced that it was going from a point system to a cash system stating that people do not want points, they want money. Well bluntly as you can read in customerthink many people do not want the money; they wanted the points. That is why they went to Woolworths in the first place. The pressure has become so extreme that Woolworths has done a complete turn and are now planning to bring back an option for the points.
Like our loyalty system, the customer will still need to get a card with their personal details. This is because the value of the customer monitoring, email addresses and the information is considered to be worth 1% and Woolworths is not giving up that 1% up, and neither should you.
Clearly as this shows that many shoppers would rather be earning point and discounts when they shop than not. So shops that have a loyalty programs offer a competitive advantage.