It seems like almost every business has jumped on the loyalty card program bandwagon. From grocery stores to pharmacies and restaurants, retailers everywhere are launching customer rewards programs. Have you ever wondered why? Sure, customers stand to benefit from participating in loyalty card programs. They get discounts, special offers and cash-back opportunities. But the benefits for retailers are just as great, if not better. Even with the cost of a loyalty gift card program, you still end up being a winner in the end.

If you’re considering launching a loyalty card program, here are some of the many benefits you’ll pick up along the way:

1. Better Data Tracking

Every time a customer swipes a rewards card, you’ll get a clearer picture of who is buying what. The data will allow you to examine shopping patterns and use the information to make better business decisions. For example, use the information to make better choices about product selections and inventory supply.

2. Improved Marketing

Armed with all the data you’ll collect from customers who fill out a rewards program application, you’ll be able to develop marketing campaigns tailored to specific groups. Offer customers special, personalized deals based on their age, interests or previous purchases.

3. Better Customer Retention

A few incentives go a long way in creating loyal customers. If your customers believe there’s something to gain from giving you their repeat business, they’ll come back time and time again. Simply by offering a coupon for $2 off the next purchase, you’re dramatically increasingly the likelihood that a customer will come back.

4. More Frequent Business

With a loyalty program, the more often a customer shops, the faster they can start claiming rewards. A customer who’s just $5 away from earning a $25 gift certificate might find an excuse to stop by your store. Customers who used to come in once a month might start coming twice a month or once a week.

5. Increased Product Awareness

Do you offer a valuable product that – for one reason or another – is simply sitting on the shelves? Maybe you’re a retail shop that specializes in handmade goods, but the greeting cards in the back of the store just aren’t selling. By offering items like these as incentives, you can promote items customers may not know you have.

Peter Black is a editorial writer for a number of small busineess marketing websites.