Loyalty Programs : A Loyalty Program Essay

Loyalty Programs : A Loyalty Program Essay

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Ninety percent of Canadians are enrolled in at least one loyalty program. Market research has shown that loyalty programs are growing to be very popular in today’s market. A loyalty program is a program offered by a company to customers, who make frequent purchases. Loyalty programs are of benefit to both the consumers and the business. The consumers benefit by receiving coupons, special access to sales and new products whereas the company benefits by gaining an abundance of knowledge about the consumers, through their purchasing habits. Loyalty programs have proven to be very successful for several companies such as Target, Starbucks, and Shoppers Drug Mart. The senior management in sales and marketing believe that initiating a loyalty program within the company, Tech Garden would increase our consumer sales and satisfaction as well as allowing our marketing department to track the sales habits of our customers.

How a Loyalty Program Works

Market research strongly suggests that loyalty programs are successfully communicating and building relationships between the buyer and the seller. The ultimate goal of the company is to get to know the buyer, their habits, their demographics, and how they relate to the company’s sales of specific products. Most loyalty programs require the customer to ‘sign up’ for rewards/ coupons ect. and in order to do so they must provide us with a valid email address and answer a series of questions that help to find their nearest store locations, provide them with upcoming sales that suit their preferences, and suggest new products. This benefits us as a company by providing us with a databank of information about the customer and their purchasing habits. This data would allow our marketing department...


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...n to build lastly relationships with our customers. It will also increase the lifetime value of our customers, which takes into account their projected lifetime as a customer. The main goal of the loyalty program will be to increase sales and improve our marketing techniques. The program will encourage customers to make frequent purchases for which they will gain rewards and redeem for a specified dollar value. We will lose some profit when the customers redeem their points however they will only be able to redeem the points in increments of $10 and will be required to pay the tax difference. All in all we will not lose enough to affect our profit on a large scale because our sales will be increased as a result of our loyal customer base. In conclusion we would request that the loyalty program be implemented into Tech Garden locations everywhere to maximize profits.

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