Loyalty programs are marketing efforts created by businesses to encourage the buying behavior of customers by rewarding them with discounts, items or services. Loyalty programs benefit the companies since they entice customers to visit their stores more often, buy their products, and patronize them. In return, customers also get to reap the benefits of patronizing a company’s product or service.

Loyalty programs offer benefits to customers in various ways. What customers get actually depends on the type of loyalty program the company offers.

Rewards programs give loyal customers awards not related to their product or service. Rebate programs reward loyal customers in accordance with their purchasing activity. A partnership program, on the other hand, involves marketing to the database of another company enabling loyal customers to select rewards from either company. The affinity program entails building lifetime value relationships with customers based on mutual interests instead of rewards. Meanwhile, the appreciation program rewards loyal customers mostly with their own product or service.

Loyalty cards are the most common form of loyalty programs worldwide. In the United States, about 75% of consumers have at least one loyalty card and more than 1/3 of all buyers have two or more. As part of this loyalty business model, companies provide loyalty members with identification cards made of either paper or plastic. These are also called club cards, reward cards, point cards, loyalty cards, and advantage cards. Supermarket loyalty programs for example, generally offer discounts on certain products to loyalty cardholders. Airline companies offer loyalty programs through frequent flyer miles. A passenger accumulates points by flying on the airline and then cashes in the points in exchange for airline tickets, upgrades, or third party benefits. Some non-airline companies also tie up their loyalty programs with airline companies by offering frequent flyer miles in exchange for various products and services such as telephone usage.

More information on loyalty programs:

An article explaining how to run an effective loyalty program.

Affinion offers a wide range of products and services to help you attract new customers, strengthen relationships with existing customers, and produce new revenues.

Company profile of Trilegiant, a company that runs a wide variety of loyalty programs.

Trilegiant has published a helpful FAQ page explaining its affiliation programs.

Vault has published a guide on pursuing a career at Trilegiant.

America Online and Trilegiant Corporation Announce New Marketing Agreements.