I was reading today about the Bauer program here on Reader Rewards, which is a loyalty marketing program to increase sales of their products.
According to the article, it lifted sales by 1.6%, which is believable for a loyalty program but as the article makes clear it is not primarily a loyalty program but a data collection program. This is the point of all good retail loyalty programs, that extra percent or two you can pick up by getting the customer's information to market to these people. That way, they buy more by either making bigger purchases or buying more often depending how you structure the program. This is what justifies the cost of the program, and it is what your program aim.
And they do buy more if it's done properly. You can see it on the Average Daily Sale value, Units Per Transaction, Margin on Goods sold compared to the non-member customers.
What is also important is that not only do they buy more, but as they are happy that they get others to join such as friends and family.
In my experience, the biggest mistake retailers make when launching such a program is that they do not communicate enough to the members; you should not be waiting till they come into the shop, if you do that many of the members of your program will just forget you. You need to communicate with them online.
