With the advancement of technology, customer loyalty programs are becoming exceedingly attractive among the retailers. However, customers are not getting the best share out of the programs. It is high time that retailers see clients not from the transaction viewpoint but from the partnership viewpoint. The critical concepts that relate to the customer or employee rewards include:

1. Most retailing is at the very rudimentary level in the use of the customer loyalty programs and hence clients perceive the programs to be punitive.

2. The most successful retailers find connections with their clients through customer
loyalty programs at 3 levels named: the initialization or the introduction level, the communication initiation level and the feedback loops initiation level.

3. The retailers should devise mechanisms and approaches to create a partnership with their clients.

4. Information that is gathered for the customer loyalty programs can be helpful to the clients in making better decisions on sales and purchase transactions.

If retailers can use the customer loyalty programs effectively, they stand a chance of winning more customers even in the most uncertain marketplace. To effectuate this, there is one effective way in which the retailer can improve their customer loyalty programs: engaging the clients.

Retailers should think of strategies for creating strong partnerships with their customers. The customer loyalty programs should not appear as though the retailers are ambushing the customers. The retailers should, therefore, connect with their clients through customer loyalty programs in three main levels.

  • Introduction level

The retailers should offer generic rewards to their customers for enrolling in the customer loyalty programs.

  • Initiating communication

The retailers should directly contact the clients via phone or email and offer rewards that are linked to the client’s needs.

  • Initiation of a feedback loop

The clients and the retailers initiate effective feedback loops. This feedback loop can only be made possible of the retailer engages in effective customer relationship management (CRM) and partner relationship management (PRM).