The success of Amazon Prime and other programs has many retailers rethinking their approach to customer loyalty. Retailers have historically favored building out free customer loyalty programs, which attract three times the number of members that fee-based programs do. Free programs are low-risk propositions for both customers and retailers alike, but premium retailer loyalty programs have grown increasingly popular over time. Charging a fee guarantees that merchants generate revenue upfront, and consumers who pay for benefits are more likely to shop with that particular retailer to guarantee a return on their investment. Merchants also gain quality data about their best customers—information and insight that can be leveraged for more personalized interactions.
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RETAIL DIVE 5/10/2016