Loyalty programs can be a powerful marketing tool, effective at stimulating consumer spending while simultaneously helping those enrolled save money.
While this practice has long been used by supermarkets and restaurants, credit card companies have recently begun entering into the rewards market offering airline miles, cash back on purchases and added discounts.
“In any sector that utilizes loyalty marketing, loyalty programs are fast becoming a very important part of the relationship with the customer,” says Susan Menke, vice president and behavioral economist at Mintel.
In a recent study by her company, the most attractive credit card advantage was found to be cash back on purchases, with 36 percent of respondents saying such a program could attract them to a new credit card. The survey also found that 25 percent of respondents would take up a new card if offered free merchandise, while 7 percent want airline miles.
However, almost a quarter of those surveyed said they actively examine credit card offers for rewards programs. This may mean many consumers will opt for new cards as an addition to their pocketbooks in time for the upcoming holiday spending season.