Major retailers with Loyalty Programs like Costco, Wholefoods Market, Starbucks, Home Depot, and Target, have managed to secure a spot on Fortune’s list of The World’s Most Admired Companies of 2015.

Loyalty programs keep customers happy and show them that a business cares. Loyalty programs create additional channels through which retailers can communicate with their customers and foster positive customer relationships. Loyalty programs can be used to interact with customer and send customizable offers and make them feel valued. Through rewarding loyal consumers, retailers with loyalty programs have enhanced customer engagement and satisfaction. Home Depot, one of the few hardware stores with loyalty programs, had the highest level of consumer engagement in the Home Improvement Retailer category.

Enhancing customer engagement, though proper communication and rewarding, leaves your customers satisfied. Satisfied customers are loyal customers and loyal customers will always recommend their retailers to others. Loyal customers can be more effective than most marketing strategies through cost-effective word-of-mouth referrals.

Loyalty programs keep customers coming back. Costco, #16 on the list of world’s most admired companies and 2nd in worldwide retail sales, is outperforming its competitors in terms of sales growth and productivity according to Planet Retail analyst, Sandy Skorvan. She also added, “The retailer’s ability to keep members engaged and coming back for more is unparalleled”. Unique and successful loyalty programs help attract customers away from competitors, increasing repeat business and profitability.

Kroger, the U.S.A’s 2nd largest supermarket chain by revenue, stated that customer loyalty is the reason behind their increase in sales while dropping prices. Loyal customers are committed to the retailers that give back meaningful and valuable rewards. Studies show that loyal customers become less price sensitive than unsatisfied customers. Today, customer loyalty is not just about keeping your customers happy; it is the key to maximizing profitability.