Marketing program designed to enhance brand loyalty by cultivating an ongoing relationship between a marketer and his customer. Successful loyalty programs encourage the consumer to buy frequently, to increase the amount spent each time, and to concentrate all or most of their related purchases on that brand. Most loyalty programs offer perks for membership in a club or program and reward purchases. Rewards may be based on the dollar value of purchases made or on the frequency of purchases. The most well-known loyalty programs are airline frequent-flyer programs that offer discounts against future travel called award miles. Most large supermarket chains now have frequent-buyer clubs that offer no-coupon discounts as well as newsletters and affiliate discounts. Loyalty program tactics also include regular communication with customers such as reminder mailings, private credit cards, cross-sell and up-sell offers, satisfaction and opinion surveys, and collection of information for member databases. See also frequency discount.

Dictionary of Marketing Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved.