News

Report sheds light on value of loyalty programs

July 29, 2008

ATLANTA — Vesdia Corp., provider of loyalty marketing and merchant network services, announced it has underwritten the research report, "Responsive Customer Loyalty: Creating Customer Commitment in Retail." The new benchmark report, written by Aberdeen Group, delineates characteristics of Best-in-Class retailers and highlights the use of loyalty offerings to both increase revenues and create optimal customer buying behavior.

According to the research:

• Best-in-Class retailers report average year-over-year same store sales increase of 7.4 percent.
• Best-in-Class retailers report improved repeat customer orders by an average of 21.8 percent.
• Best-in-Class retailers developed cross-channel marketing programs for a more holistic customer value proposition.
• Retailers without a loyalty program have poor sales and customer retention results compared with retailers that operate a loyalty program.
• Retailers who desire "Best-in-Class" performance are recommended to make loyalty programs a top priority of their CMO's strategic agenda.

The research also identifies developing lifetime customer value as the top need driving loyalty-related decisions.

"In times of stagnant growth, retailers need to develop lifetime customer value through improved customer retention, re-activation, and acquisition strategies to improve long-term stakeholder value," reported Sahir Anand, senior analyst and chief author of the Aberdeen report. "Survey results show that 51 percent of Best-in-Class retailers use loyalty elements such as rewards. Our data also shows that Best-in-Class retailers are over 300 percent more likely than average or laggard retailers to include coalition loyalty marketing initiatives such as those offered by Vesdia as a component of their loyalty strategy."

The Aberdeen report also notes ROI measurement of customer loyalty programs as an ongoing requirement for success. Best-in-Class companies are five times more likely to track, store and analyze customer analytics.