Database: Spoils for the Loyal

The Value of Loyalty

A good loyalty program should increase a customer’s quantity of purchases and/or the dollar amount spent. Weber advises beginning with at least two goals in mind: to increase your customer lifetime value rates, and to boost sales and margins by pre-set amounts.

An example is Eastwood, an automobile tools and services cataloger. For an annual fee of $24.99 customers can join the Eastwood Buyer’s club, which entitles them to free shipping on every order placed via catalog or Internet, as well as purchases made at car shows and its retail store for one year. Members also get special e-mail announcements about new products and notifications about special catalog and Web promotions. The program encourages customers to buy more—and more often—because they save on shipping.