Loyalty programs are powerful marketing tools for credit card companies, supermarkets and restaurants, but how do consumers choose one program over another?

Mintel Compermedia, a provider of direct marketing information, did a little research on that topic. It found that instant redemption opportunities -- like cash back at the register -- were an incentive cited by almost half (47 percent) of consumers that could potentially entice them to use a particular loyalty program more than others.

Consumers are similarly attracted to relatively generous cash back opportunities -- an option that would be the deciding factor for 36 percent of respondents. On the other hand, consumers are somewhat disenchanted with airline miles. Only seven percent of those surveyed say a program that offers airline miles would be an effective incentive to choose one over another. These consumers tend to be in the higher income groups.

"In any sector that utilizes loyalty marketing, loyalty programs are fast becoming a very important part of the relationship with the customer," says Susan Menke, vice president and behavioral economist at Mintel. "It seems that now is the time to focus on adding or improving loyalty programs to help engage customers and maintain and even grow their relationship with the post-recession consumer."

What next?

So, once they've chosen a rewards program, what do consumers want to see more of? Sixty-one percent of respondents say lower overall costs for merchandise they would have purchased anyway is an important attribute of a loyalty or rewards program. Getting merchandise or taking trips that they wouldn't normally be able to take was deemed important by 25 percent of consumers.

"Loyalty program members are quite often the most profitable customers for marketers, and those who use loyalty programs tend to be more brand-loyal," adds Menke. "By personalizing redemption opportunities and offering easy to redeem savings, companies can lure and retain more customers."

Twenty-four percent of those surveyed say they actively examine credit card offers in order to compare rewards programs, while 10 percent have switched to a different primary credit card in the past because of a better rewards program.

Caveat

It is important to keep in mind that playing on a consumer's loyalty or affinity is a favorite tactic of scam artists.

In Kentucky, a trusted Bible teacher allegedly bilked the faithful out of hundreds of thousands of dollars.

 In a recent column, ConsumerAffairs.com's Jan Yager quoted pointers from Tom Ajami, co-author with Bruce Kelly, of "The Financial Serial Killers," cautioning potential investors to be leery of finding an investment adviser through an affinity group -- your church, synagogue, or other house of worship, your country club, or some other shared association.

Ajami noted because that financial adviser is part of your affinity group, you are more likely to let your guard down. You do not scrutinize this new person as much as you should or need to.