Magazine Article | January 25, 2011

Research & Trends: Drive Customer Retention With Cross-Channel Rewards

Source: Innovative Retail Technologies

By Chris Cunnane, Aberdeen Group

As retailers continue to evolve the sophistication of their loyalty offerings to meet the changing needs of customers, channel integration is becoming more important than ever, and loyalty rewards must be consistent and personalized across all channels of delivery. To this end, leading retailers have made the concerted effort to develop multitier loyalty programs, according to berdeen's March 2010 Cross-Channel Customer Loyalty benchmark report. A multitier loyalty program is designed to reward a retail organization's most profitable customers and allows a retailer to offer incentives based on customer purchase patterns. By promoting rewards to its most profitable customers, a retailer can ensure that each customer feels a high level of personalization in the purchasing experience. Best Buy, for example, offered an exclusive sale for its highest tier loyalty members during the recent holiday season, based on a spending threshold. The members had access to in-store discounts and received cash-back rewards for referrals. Aberdeen data has shown that this high level of personalization has a direct correlation to improved customer loyalty.