In designing a customer loyalty program we always take into account cost.it is a cost adding customer benefit.what other factors should we consider?

Amer because its a customer loyality program first thing would be customer service analysis if its upto the mark because if its out of order and then we are putting efforts on a loyalty program there could be negative effects if customer is not happy so before launching such programs a effective feedback will help.

Second would be obviously cost based on benefits given to customer for using the product or service and frequency like frequent flyer program or reward points at super markets, malls, hotels etc.

Even in loyality program updates, timely response would be beneficial. Like if someone has claims for reward points and customer care department takes30 days to process who would like to be part of programme.

Third thing would attractiveness if the program is not attractive then again people wont find interest to be part of program. Personalized service like cards with names, levels like bronze, silver , gold , platinum gives them liberty of using product or service and enjoy rewards as per usage.

Quality of reward is another aspect if the reward given doesnt have value and quality again customers feel cheated and dissappointed so just getting them rolled in for a program wont serve the purpose it should be really creating value apart from best product /service offered.

Dear Amer;good day4 u and4 all human ;))

I think it varies from one project to another, and there is no fixed point Sawa customer satisfaction and them loyalty.

Whenever I go to buy clothesor any branded product all brands take the personal info and gives reward points if you buy their products so that we come again and shop more. But what I fail to understand does these tricks or loyalty programs work I read an article in which a survey was done regarding loyalty programs and the outcome was customers were not really interested in these loyalty programs as they felt there were 'Insufficient rewards" and Low shopping level.

The focus should not be on the transactional part of the program but should go significantly beyond the points in order to have loyal customers.

Considering that it cost5 times more to gain a new customer you could also see it as a cost reduction or an investment. Wouldn’t it be nice to know that70% of your clients will buy next day/month/year again?  I think that is a completely different starting position in an open market.

We all know such type of programs are designed by company's in order to boast its customer base and have a certain no of loyal customers who give repeat business since it is cost effective to have a repeat customer than to identify a new one and a certain budget is always kept aside for such activity considering the Sales component nad Expenses incurred.It is a well known fact that it takes much more resources and time to acquire new customer than to keep an existing one. Many businesses discover this fact and quite a few are taken by surprise. Marketing analysts estimate that repeated customers could generate between5 to15 times revenue for the business than first time or one time buyers alone.

It is important to understand that for customer it is often a challenge to find merchant whom he trusts and once first time customer has positive experience – he is willing to come back for more.The revenue potential that could be generated by repeated customer is huge and yet it is estimated that75-90% businesses are doing little to nothing to keep customers coming back.

 The easiest and the most important element of any business model is adding customer loyalty program into your regular business process.

Good quality loyalty program takes very little effort to launch and yet has potential to deliver immense residual benefits for any business.There are many customer loyalty programs in vogue now a days and you can choose from:

1.Point System-Frequent Buyer

2.Club Membership-Siver,Gold,Platinum as per the business yield from a given customer.

3.Discount Cards in Multi tier System with a business slab to each tier.

4.Indirect Benefits through a tie up with other company.

5.CustomerLoyaltyEngine-A Fanfare,Contest for Kids.

Moreover if you are very innovative you can design and tailor a Customer Loyalty Program as per the requirement.

Target customer affects the loyalty program very much so you should focus on the best customers that you already have and attract new customers . It can be more profitable to lose bad customers for example customers who buy only your discounted lines and nothing else.

Also, marketing mix 'four Ps of marketing' (product, price, place and promotion) affects the loyalty program. There are two new 'Ps' added to the 'four Ps of marketing' that benefit the customer loyalty are people ( how they affect customer loyalty) and performance ( the quality in delivering products and services in a way that improves loyalty ) .

Even in loyality program updates, timely response would be beneficial. Like if someone has claims for reward points and customer care department takes30 days to process who would like to be part of programme.

Sales vs expenditure

Return on investment. We can't assess cost without expeted return.