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New York, NY—Facing more competition in-store, online, and from discounters, luxury retailers are placing greater emphasis on loyalty programs, says a new survey from The Luxury Institute.

These programs can be highly effective sales builders. For example, says the report, 40% of Neiman Marcus’s sales last year came from its reward-status InCircle members. Further proof that it’s easier to sell more to existing customers than add new customers, both Saks and Nordstrom recently revamped their loyalty programs, lowering and in some cases eliminating thresholds to spending for certain rewards.

According to the survey, 72% of wealthy consumers participate in some kind of reward program, and 75% of those say the program influences their shopping decisions. The most popular were credit cards, airlines, hotels, and grocery stores. Least popular—with only 7% of respondents indicating participation—were brand programs, but 38% of respondents belong to a department store program. Men are most likely to be members of travel-related programs, while women are more likely to participate in retailer reward programs.

The biggest incentives for joining such a program were offers and rewards, earning and redeeming points, and free gifts and services. The free gifts carried the most importance with women, younger shoppers, and those with net worth less than $1 million.

Retailers who do offer a loyalty program may need to up their promotion efforts, though. The perception among respondents is that less than one quarter of luxury brands and retailers offer loyalty programs, but they think many more should.

Read the executive summary here.

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