Despite the fact that shoppers have spent more than $25 billion in online purchases this holiday season, the economy is still a factor for many merchants - both online and offline. Yes, people are spending for the holidays, but historically spending plummet in the first and second quarters of a New Year. It's the natural cycle of things, but some tips from Loyalty 360 may help merchants better prepare for declining transactions by creating a more loyal customer base.

As the global economy continues to struggle, customer retention and engagement will become more important than ever. That is the takeaway from a recently released prediction sheet from Loyalty 360. Although group couponing deals have become a buzzword in 2011, the complaint of many merchants is that these deals aren't creating a loyal customer base. And that is where tip one comes in.

Tip 1: Loyalty is a destination, not a single journey. To create a more loyal customer base, businesses need to offer what the customer needs: loyalty programs aren't about free goods or services (although those things are rarely bad). Loyalty programs are about a customer's need - and those needs should be based on what a customer does on-site. Are they ordering? Do they need peripherals? What is their buying cycle and at what point are they today? Knowing these things allows a merchant to create a personalized experience, which gives the customer more of what he or she needs.

Tip 2: Building loyalty means building data. Those last few questions in the above paragraph? Each can be answered through customer data. How often does a consumer visit a website? What does he or she purchase? Are they engaging through social media? Use your loyalty program to collect data - safely, please - and then put that data to use…