Keep Customers Coming Back for More Offering several payment options and loyalty programs will attract customers to your business.

Q: Beyond offeringgreat customer service, what can I do to make more sales and keepcustomers coming back?

A: The notion ofcustomer loyalty seems almost quaint today, when shoppers openlydefect to competitors that offer lower prices. But the good newsfor merchants is that shrewd shoppers also value flexibility,convenience and security. And a simple way for merchants tode-emphasize price-and attract more business-is to offer customersother incentives to shop, such as a wider range of payment optionsor the ability to earn loyalty card rewards.

Thanks to smarter payment technology and changes in consumerattitudes, electronic payments have become more prevalent thanever. MasterCard International, one of the world's largestcredit card networks, reports that its branded cards were used inmore than 11.6 billion transactions in 2001, generating a grossdollar volume of $986 billion. This almost trillion-dollarvolume is up 17.6 percent from 2000.

It's no mystery why the number of e-payments is growing.Consumers love credit cards because they are easy to use, offerincreased buying power and are safer to carry than cash. Debitcards offer shoppers another fast, secure way to pay. Andelectronic checks-secure transactions that verify the availabilityof funds and automatically transfer money-represent a third,increasingly popular alternative to cash.

For store owners, accepting these electronic payments has neverbeen easier. Merchant accounts can be approved in as little as 24hours. And payment solutions exist for virtually every type ofbusiness, from restaurants and online retailers to mobile merchantsand homebased enterprises. Best of all, business owners don'thave to pay upfront for terminals, printers or software becausemost payment providers offer short- and long-term equipmentleases.

Merchants who offer more payments options to their customersenjoy many advantages, including:

• Access to a wider customer base.
• Higher frequency of sales.
• Larger ticket amounts per sale.
• Increased customer traffic.
• Augmented revenue from customer impulse buys.
• Strengthened credibility.
• Lower incidences of employee theft.

In addition to credit, debit and e-check acceptance, businessesare using gift and loyalty cards to attract and keep customers.Research shows their efforts pay off. In a national survey onplastic card usage, 45 percent of respondents said they spent moremoney at stores where they were loyalty program members. The samestudy revealed that gift cards, like loyalty cards, help merchantsincrease store traffic and boost incremental sales. Approximately55 percent of survey respondents who have received gift cardsreported that they needed more than one trip to deplete the valuestored on their cards. In addition, the majority of return shopperssaid they spent more than their cards' initial value.

Not surprisingly, many businesses that once offered giftcertificates have traded in paper for plastic. CardMarketing magazine estimates that by 2005, plastic cards willrepresent 80 percent of the gift certificate market, a total ofabout 850 million cards. The advantages plastic cards offermerchants are undeniable. For one, retailers no longer have torefund cash for unspent balances. To storeowners, this means morepositive cash flow and repeat business. Plastic cards are alsogreat advertising tools because they are brandable, durable and areeasily carried by shoppers. Equally important, the cards are muchmore difficult to forge than paper gift certificates.

And that's just the beginning. A business owner can also usethe information encoded on a gift card's magnetic stripe todetermine where and when the card was purchased, where and when itwas used, and what the card recipient bought. In addition to thesebenefits, loyalty cards offer merchants even more options,including the ability to:

• Track customer behavior and history.
• Allow cardholders to earn points toward rewards.
• Overcome slow sales by offering extra points on purchases madeduring off-peak seasons.
• Encourage customers to spend more by offering bonus points forpurchases over certain amounts.
• Create special promotions, such as members-only discounts.
• Allow customers to apply their points toward future purchasesor redeem points for free branded merchandise.

The list of benefits grows as payment technology gets bothsmarter and more economical. But the bottom line remains the same:One of the best ways to attract new business while maintainingexisting customers is to offer shoppers more ways to pay for goodsand services. Payment flexibility helps clinch sales and encouragesnew customers to return.

Cardservice International Senior Vice President ofSales John Burtzloff is in charge of sales strategy andexecution and thus is responsible for managing all aspects of thecompany's marketing, communications, telesales, checkguarantee, new accounts and sales support activities.

The opinions expressed in this column arethose of the author, not of Entrepreneur.com. All answers areintended to be general in nature, without regard to specificgeographical areas or circumstances, and should only be relied uponafter consulting an appropriate expert, such as an attorney oraccountant.