Customers can earn loyalty rewards when they shop using a private label credit card. They can then redeem these cards to receive discounts in the future. Private store cards bolster customer retention by doling out rewards based on the number of purchases a customer has made.
What Is Customer Loyalty?
Customer loyalty is a byproduct of a customer’s positive experience with you and describes an emotional relationship that builds over time. Loyalty customers:
- Use what they purchase
- Interact with you through various channels
- Refer others to you
- Are your biggest proponents
- Provide proactive, positive feedback
- Purchase repeatedly
Why Is Customer Loyalty Important?
Customer loyalty programs are essential because they build an emotional connection with buyers. Other benefits of customer loyalty programs include:
- Improved customer insights.
- Broader outreach.
- Increased growth and profits.
What Is a Private Label Credit Card?
Private label credit cards are cards used exclusively at specific retailers. Also called store-brand cards or white-label credit cards, private label credit cards do not carry any particular logo, such as a Mastercard or Visa. They are managed by a commercial finance company or bank. Customers cannot use their store-brand cards to buy products from any retailer other than the brand where they are issued.
Private label credit cards help retailers make shopping more convenient through specific features such as accepting returns without receipts.
How Can Private Label Cards Increase Customer Loyalty?
Private label cards help bolster customer retention by encouraging customers to have less interest in competitive offers. These store-brand cards result in increased sales and increased lifetime value. Shoppers who sign up for private label credit cards tend to want access to increased purchasing power, show an affinity for the brand and are continually on the lookout for the benefits received by various loyalty programs.
Benefits of Private Label Credit Cards in Loyalty Programs
Store cards in loyalty programs provide benefits and incentives such as:
- More actionable data through communication: Banks tend to place restrictions on how retailers communicate with their Private Label Credit Card (PLCC) holders. As a marketer or Head of Digital Innovation for your company, you can access more data and a reason for better communication with private label credit cards in loyalty programs.
- Increased motivation to sign up for the loyalty program: When sellers include private-level credit cards in loyalty programs, customers may see extra value in signing up for the credit card.
- A broader audience: A seller’s user base will be limited if they start with a private label card without a loyalty program. Adding a loyalty program open to all shoppers allows for more expansion.
Examples of Brands That Have Seen Success in Customer Loyalty
Nordstrom, a leading fashion retailer operating in the U.S. and Canada, saw success after opening a loyalty program in 2016. The American luxury department store chain grew loyalty enrollment by 30% after opening the program to all customers in the first quarter.
Talbots, another American specialty retailer, was able to tap into their 1.75 million members eight years after launching their Classic Awards. By 2013, Classic Awards members represented 70% of the business and there was 40% year-over-year participation growth.
Boost Customer Retention With Store Credit Cards
Increase customer loyalty with rewards programs and discounts, and introduce a private label card program today. Create a free account with us today to learn more about Hydrogen’s no-code embedded finance platform.