Loyalty Program

AAA

DEFINITION of 'Loyalty Program'

A rewards program offered by a company to customers who frequently make purchases. A loyalty program may give a customer advanced access to new products, special sales coupons or free merchandise. Customers typically register their personal information with the company and are given a unique identifier, such as a numerical ID or membership card, and use that identifier when making a purchase.

INVESTOPEDIA EXPLAINS 'Loyalty Program'

Loyalty programs provide two key functions: they give a customers rewards for brand loyalty and they provide the issuing company with a wealth of consumer information. While companies can evaluate anonymous purchases, the use of a loyalty program gives additional information about the type of products that may be purchased together, and whether certain coupons are more effective than others.

RELATED TERMS
  1. Data Warehousing

    The electronic storage of a large amount of information by a ...
  2. Brand Management

    A function of marketing that uses techniques to increase the ...
  3. Brand Loyalty

    When consumers become committed to your brand and make repeat ...
  4. Data Mining

    A process used by companies to turn raw data into useful information. ...
  5. Brand Equity

    The value premium that a company realizes from a product with ...
  6. Longitudinal Data

    The process of collecting sample observations from a larger population ...
Related Articles
  1. Budgeting

    Drawbacks Of Travel Reward Programs

    These nearly universal loyalty programs can have handy perks, but they're not a free ride.
  2. Entrepreneurship

    Reality Check: Why Startups Fail

    New ventures have only a 50% chance of making it through the first five years. Find out why.
  3. Active Trading

    Data Mining For Investors

    Being an informed investor is extremely important, but where and how do you get the data for your research?
  4. Entrepreneurship

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  5. Entrepreneurship

    9 Tips For Growing A Successful Business

    Give your business what it needs to thrive and it will reward you for years to come.
  6. Chart Advisor

    Profit From Holiday Spending With This ETF

    As Americans finish purchasing the last of their holiday gifts, the consumer discretionary sector will continue to be one of the primary beneficiaries.
  7. Insurance

    Who are the best-rated auto insurance companies in the US?

    Learn which U.S. auto insurance companies have the best consumer ratings and who is eligible to purchase auto insurance from these companies.
  8. Budgeting

    What are the pros and cons of digital gift cards (e-gift cards)?

    Examine the pros and cons of gift cards. Learn about protection in case of loss, monitoring spending by teens and wasted small balances.
  9. Savings

    What causes negative inflation or deflation?

    Find out what deflation is, what causes it, how it hurts the economy and how it can lead to a worsening cycle of deflation that is hard to break.
  10. Savings

    How can inflation be good for the economy?

    Find out why some economists and public policy makers believe that inflation is a good, or even necessary, phenomenon to help economic growth.

You May Also Like

Hot Definitions
  1. Christmas Island Dollar

    The former currency of Christmas Island, an Australian island in the Indian Ocean that was discovered on December 25, 1643. ...
  2. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  4. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  5. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  6. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
Trading Center