competition through the use of loyalty schemes

BENEFITS FOR THE CUSTOMER

• discount
• promotional offers
• larger awareness of products/ services
• basis for information exchange of what customer wants.
• customers often feel more positively about the rewarding, thanking/ treating aspects of the schemes rather than the discounts. some enjoy the 'game' of collecting points through offers to get the reward they want.
• benefit from buying power of scheme organiser to get 3rd party offers which they otherwise could not afford.

BENEFITS FOR THE COMPANY

• better knowledge of actual and potential customer value, behaviour and needs, providing a quantified, measurable basis  for determining and implementing efficient policies.
• customer knowledge for use of other parts of marketing and the company
• creating focus 
• the ability to get quick learning from launches, other trial activities and marketing activity in general
• improving pricing management and its balance with promotional activity
• allowing brand-strength to be extended and deepened through use of more target communication.

EXAMPLES ARE BOOTS, SUPERDRUG, SAINSBURYS, TESCOS