Written by Alex Malyshev on September, 4, 2019

Rewarding Loyal Customers Is Good for Business

Loyalty programs have been around for years. American retailers have been rewarding their customers for purchases since the late 18th century. For almost four centuries the idea remained the same: to attract and retain more customers. And what about today? 

Loyalty programs are evolving. Now businesses reward their customers not only for purchases, but for any action a company needs its client to make. And with the world going digital, users increasingly move from physical cards to digital reward systems on their smart devices. 

The loyalty market is valued at over $30 billion. Recent reports show that Industries benefiting the most from implementing loyalty programs are gas with a 99% increase in sales, followed by hotels with 82%, and drug stores with 63%. 

Melia Hotels International is a great example of a company benefiting from modernizing its loyalty program to create a more personalized experience for their guests. Insights from data collected online enabled the company to improve customer service in the form of individual trip recommendations and exclusive offerings to loyal members. 

In 2018, Melia Hotels expected 40% of profits to come from direct sales, mainly from the members of the loyalty program. In just one year, digitization of their direct sales channels increased sales by 27%. The Melia Rewards program itself resulted in a 35% increase in membership which accounts for 80% of the company’s total direct sales.

Digitization completely redefined Melia’s Loyalty Program. By rewarding direct bookings with points spendable on complimentary stays, online shopping, and flight tickets, they lowered costs by foregoing commission to intermediaries.  

Providing customers with support and services through every step of their journey helped to establish a valuable emotional connection. As a result of the changes, Melia Rewards program grew by 44% and became one of the organization’s “pillars of the revenue strategy.”

Customer loyalty can do wonders for any business. With modern technology and innovative ideas, organizations can keep customers engaged and motivated. Our API offers a convenient way to provide any customer with an individual cloud wallet to store, earn, and spend points. They can access their balance and transfer points to friends and family as gifts or redeem a bigger reward together. 

Repeat customers primarily rewards members, spend 67% more compared to new clients. It is not only easier but also more profitable to sell to existing customers, compared to acquiring new ones. Rewarding them for sticking to one business can create far more valuable consumer relationships more often than not.

Combining great customer service with new technology can transform the way we provide and consume goods and services. What would you add to make the process more beneficial for everyone? 

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