Loyalty programs are programs which companies develop for attracting customers. They allow attracting consumers’ attention and improve the relationship with customers. Today loyalty programs are widely applied in business. Among the most common loyalty programs, there are the discount system, point system, awards, back cash, private label, customers’ recognition.
The types of organizations and products which benefit from 'loyalty programs'Retailers and organizations which provide customers with certain services (e.g. transport companies, banks, restaurants, cafes, educational courses and others) mainly benefit from loyalty programs, since they allow keeping existing customers, attracting new customers, increasing sales, and shifting spending to higher margin products . Thus, when a company sees that the demand for a product is falling, it may propose discount for it. It will increase the number of consumers and the company will get more profit. Many supermarkets propose discount cards for their consumers. It attracts customers even though the prices for some goods are higher than should be since customers believe that they save money from discount. In fact, they spend more, than they will do in other shops. Not only companies but products which cannot be saved for a long time, also benefit from loyalty programs. Loyalty programs allow selling such products quicker. What is more, very expensive goods and products for which demand is low benefit from these programs since discounts for them attract more consumers.
Finally, companies may use discounts in order to introduce a new product in the market while consumers do not understand its advantages. Recommendations for AIMS how to build customer loyalty programs and how this programs will help AIMSToday AIM International proposes loyalty programs for individuals and institutions which buy membership for three, five years, and a year (AIM International, 2015). Thus, the membership for an individual for a year is $30, for three years is $75, for five years is $100, and for a life is $450. What is more, they propose free publications for three best articles. The company can introduce the discounts for publishing in their journals for scholars who provide more than three articles within two months. What is more, they can introduce the program of customers’ recognition by giving their members Gold, Silver, Bronze, and Premium labels. According to these cards, the customers can take part with a discount in conferences. In order to get a card, a customer should get a certain number of points for their articles and provide a certain number of articles. It will increase the number of customers of the company and retrain the existing members.
Loyalty programs provide benefits not only for customers, but for companies since they allow keeping existing customers, attracting new customers, increasing sales, introducing new products in the market, and shifting spending to higher margin products.