A loyalty program can give customers a reason to return to a store. Points, coupons and member benefits connect an individual purchase with a future reward. For the business, the important question is whether the program generates additional sales that justify its cost.
What does the research say about sales growth?
In 2021, McKinsey reported that top-performing loyalty programs can increase annual revenue from customers who redeem points by 15–25%, through more frequent purchases, larger baskets or both.
This range concerns a particular customer segment within top-performing programs. It is not an expected increase in every retailer’s total sales.
An academic study published in 2019 examined 322 publicly traded companies that introduced loyalty programs between 2000 and 2015. The authors found positive effects on sales and gross profits that persisted for at least three years. Gross-profit effects developed more slowly than sales effects.
Source: Journal of the Academy of Marketing Science, 2019.
These are international findings about loyalty programs, rather than results specific to Croatian retailers or mobile apps.
How does a mobile loyalty app support the program?
A mobile app can let customers check points, access a digital membership card and redeem coupons. In-app offers and notifications for customers who enable them provide another way to communicate between purchases.
For example, a customer might see an available reward that can be redeemed on their next visit. The value of this approach depends on whether the benefit is useful and easy to access.
Learn more about the features in Retail Loyalty Apps: A Direct Channel to Your Customers.
How can retailers measure whether a program pays off?
Track a few practical indicators:
- Repeat purchases: how many customers return and within what period.
- Purchase frequency: how often customers buy.
- Average basket value: whether spending per transaction changes.
- Benefit costs: the cost of rewards, discounts and operating the program.
Comparing members with non-members is not enough on its own: customers who already buy frequently may be more likely to join. Where feasible, compare results with a similar control group.
Start with a clear objective
Choose one initial objective, such as increasing repeat purchases. Define the program rules and measurement approach before launch.
MicroCache helps retailers connect loyalty programs with mobile apps and existing business systems.
