Categories: Retail EPoS


Tommy Chapman


7 benefits of a customer loyalty program

Published On: 23 May 2019By 3.9 min readCategories: Retail EPoS


The average UK consumer is a member of 14.3 loyalty programs: should your retail or hospitality business be one of them? 

While there are costs to designing and implementing a customer loyalty program for your business research shows that acquiring new customers costs 5 to 25 times more than retaining existing ones. Members of Amazon’s Prime loyalty program spend an average of $1300 with Amazon per year compared to $700 for customers who are non-members.

Let’s look at the key benefits of running a loyalty program.

Benefits of having a customer loyalty programme

Loyalty Boosts Revenue

The global management consultancy Bain and Company, working with the Harvard Business Review, showed that by increasing customer retention by just 5% can boost profits by 25% to 95%. The research, first conducted in the 90s, began a trend of investment in customer loyalty that still exists today.  Loyalty programs are seen by customers are a major benefit to the shopping experience both off and online. 58.7% of shoppers interviewed in 2019 study valued rewards as a part of the shopping experience, second only to quick and easy checkouts.

Acquire Valuable Data

Understanding customer behaviour is key to the future of your business. What products do customers buy together? What products do customers prefer? What are the buying behaviours of your highest spending customers? While unified customer accounts can be created without a loyalty program, loyalty is a great reason for customers to create accounts with you. The more data you have on customer buying behaviour, the better. Simple.

Increase Customer Satisfaction

Getting that tenth coffee for free or receiving a birthday discount can have a genuinely positive impact on your customer’s impression of your business. Personalised rewards based on purchase history (e.g giving customers discounts on products they actually care about) is another key approach to improving their happiness and hopefully their loyalty. It also allows business owners to think about what their customers really want.

Improve Communication

Engagement is the key to customer loyalty. Research by Rosetta Consulting showed that engaged customers were 5 times more likely to buy from the same brand in the future. The same study showed that highly-engaged customers buy 90 percent more often and spend 60 percent more per transaction. Ultimately, a loyalty program is a really good excuse to stay in touch with customers and offering discounts, deals or bonuses is a really good way to make a positive impression.

Gain New Customers By Referral

People like to talk about where and how they saved money. A study by Satmetrix Systems, showed that customers can be broadly categorised into promoters – those who are highly likely to recommend a company and/or its products – or detractors, those likely to give negative referrals. The report found that half of all customers surveyed were promoters, about one fifth were detractors and just under a third were passives – likely to give no referrals. People have strong tendencies to recommend what they like and criticise what they dislike and this can have a strong impact on the buying decisions of their friends and families.

A Decent Program Can Run Itself

While we always recommend tweaking and reflecting on your customer loyalty program, simple offers like “get your tenth coffee free” or “50% off on your birthday” can essentially run themselves once set up. These key, simple offers can form the backbone of your loyalty program and can satisfy customers for years to come.

Save Money

As discussed previously, existing customers cost 5 to 25 times less than new ones and loyal customers spend more. Setting up a loyalty program, particularly one with some degree of digital automation, can save money over creating more and more varied marketing campaigns designed to recruit new customers. Reducing customer churn is a key component of a successful business. If you still need to grow your customer base then it’s better to spend the revenue you’ve gained from loyal customers than having no loyal customers and desperately trying to acquire new ones.



A loyalty program, alongside traditional deals, sales and social media provides your business an extra opportunity to develop a meaningful relationship with your customer. It is not a cure for bad customer experience but provides an extra mechanism to surprise and delight customers and win their loyalty. The true point of a loyalty program is to offer benefits to your customer that they otherwise wouldn’t have.

At RMS, we understand the importance of loyalty program to retailers and hospitality businesses. Our premier OpSuite software allows for limitless configuration of loyalty programs for the most sophisticated retailers while our affordable RMS Register software integrates with LoyalZoo – the easiest digital loyalty program for independent businesses.

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