The Positive Effect of Loyalty Programs on Your Profit

Friday, September 12, 2014

Everywhere in the Philippines loyalty programs and loyalty cards are omnipresent. We all agree that loyalty programs are effective in engaging your customers.  

But what about in the area of profit, what is the effect of Loyalty Programs? According to Emmett C. Murphy and Mark Murphy in their book Leading on the Edge of Chaos: The 10 Critical Elements for Success in Volatile Times, “ Reducing Customer Churn by 5% increase profits by 25% - 125%.”  

This finding tells a lot on the importance of loyalty programs in the companies profit. It is a given fact that customer acquisition is expensive by 20% compared to creating customer retention programs. 

And as mentioned above, bigger profits await those that can create loyalty programs that can effectively decrease customer churn.

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