Frequency marketing rewards repeat customers with prizes such as discounts or free merchandise. Airlines, retail stores, and grocery chains use this strategy to encourage customer retention and repeat sales. Loyalty programs aim to inspire customer loyalty and gain an edge over competitors.
Frequency marketing is a promotional strategy designed to reward repeat customers and those who buy in bulk. Prizes vary but may include discounts and merchandise prizes. The main goals of a frequency promotional program are repeat sales and customer retention. There are many ways companies use frequency marketing to get customers to buy more products.
Many airlines offer a frequent flier program (FFP) to encourage customer retention. Since many airlines frequently serve the same locations, airlines with good frequency marketing reward programs can often capture a larger market share than their competitors. A frequent flyer rewards program usually has a name like OnePass for Colombia’s AeroRepublica, or Punto, which means “point” in Spanish, and is Spain’s Vueling Airlines FFP.
Most frequent flight programs give passengers points every time they fly with that airline. If saved after several flights, points can be exchanged for free air travel or service. Services may include an upgrade to the first class section of the aircraft or free or discounted hotel accommodation. Many airlines work together on frequency marketing promotions with related travel businesses such as hotels, restaurants and car rental companies.
Retail stores as well as restaurants and department stores often offer customers scratch cards as part of their repeat sales customer reward programs. Rewards are usually free products or a percentage saved on a future purchase. Since the cards are provided in one visit and usually cannot be used until another time, the customer purchase frequency rate can increase due to this type of card program. Some types of frequency marketing promotional cards are stamped every time the customer makes a purchase. After a certain number of purchases, the next one is free.
Grocery chains and other retailers often use a membership card system. Customers sign up and receive a card that they can use to receive discounts or points that can be applied to free merchandise. Point catalogs contain items that members can choose from when saving required points. Since many of the larger items could take years to save up for or require large purchases, the company hopes to gain customer loyalty through repeat business.
Loyalty programs are another name for frequency marketing promotions. The sales strategy is to keep customers who buy more products to get the prize offered in the hopes that they will become long-term buyers. Businesses often need to use specific marketing strategies to inspire customer loyalty if they have strong competitors. The more customers keep buying their product, the more likely they are to buy less of the competitor brand.
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