By Joy White

Seasoned business owners know that keeping an existing customer can be more economical in the long run than attracting a new one. Loyalty and rewards programs are one way of encouraging customers to come back and can become an important factor in the longevity and success of a business.

For some companies, a loyalty program sets them apart from the competition.

Docomo Pacific is the only telecommunications company on Guam that has a loyalty program, says Marissa A. Borja, Docomo’s public relations and corporate communications officer. Docomo’s Club Red offers its customers discounts and special offers at a network of vendors including restaurants, retail outlets, entertainment venues and wellness establishments.

“[Club Red] is one way to communicate our appreciation for [our customers’] patronage and helps us to promote local businesses and to build relationships with our community,” she says.

For other businesses, a loyalty program simply entices new customers to visit their establishment who may not have otherwise, like the Premier Hotels & Restaurants Club.

“With the abundance of eating establishments on Guam, our loyalty program was created to invite local residents to dine at the many different venues available at the Ken Corp. properties,” says Shigenori Miyoshi, PHR Club procurement manager.

Club members pay an annual fee, which provides them complimentary use of the hotels’ pools and other guest facilities and discounts on room rates and at the hotels’ restaurants and spas. The program has about 1,600 members.

Some programs bring businesses together to benefit both the customer and the participating businesses. First Hawaiian Bank offers rewards for users of its credit card, including discounts and United Airlines mileage points that can be redeemed for airfare.

“Loyalty and rewards programs help attract new customers and help strengthen relationships with existing customers. These programs are extensions of the First Hawaiian Bank relationship with its customers, and they foster additional value and trust. From a customer standpoint, these loyalty/reward program credit cards are an excellent way to optimize your spending and be rewarded with what is important to you,” says Barbie Jane Agahan, assistant advertising manager at First Hawaiian Bank.

Many of Guam’s businesses appreciate the popularity with customers, and offer several types of loyalty or rewards programs. Here are some of the most common.

Frequent buyer stamp cards
Frequent buyer stamp cards reward customers over time for purchasing a certain number of items. The purchases are recorded on a stamp card either digitally at the establishment or on a card that customers keep with them. Stamp cards are commonly used at beverage and coffee shops.

Point system
Under a point system loyalty program, customers opt in, often at no charge, by registering online or at the business location. Every purchase earns the member points, which are usually recorded on a swipe card. These points can be redeemed for rewards, which include certain predetermined products or services at a set point value.

Networks of benefits
Customers can accumulate and redeem points and rewards at a variety of participating vendors under one program. A network-style program entices customers to shop at all businesses included in the network.

Tier system
A tier system rewards initial loyalty when the customer opts in and encourages continued purchases with more rewards and exclusive offers or services. The tier system is often a variation on the point system or can be based strictly on dollar figures. The number of points or the amount spent determines which level or tier the customer is on. The value of the rewards increase as the customer moves up the tiers.

Exclusive programs
With participation in their loyalty or rewards program, some companies might also offer exclusive privileges. Members of these programs are treated as VIPs with special privileges that set them apart from other customers.

Paid memberships
Customers pay what is usually a one-time fee to have access to benefits, which include discounts on services or products that may relate to greater savings over time. Customizable memberships allow customers to determine which benefits and value fits their budgets and needs.

Combination programs
Combination loyalty programs offer a variety of reward methods for customers to include a type of stamp card, a point system, cash back and discounts all in one. The variety offers customers different ways to participate in the program, as well as the power to control their rewards.