By: Erika Stevens

Last week I posted a blog about the limitations of Groupon and the need for businesses to focus on a loyalty initiative as well as daily deals to retain customers drawn in by the discounts. So imagine my surprise when this Wednesday my twitter feed erupted as Groupon announced its new loyalty program Groupon Rewards. I would like to think it was my urging but Groupon’s critics and businesses alike have been pointing out the daily deals sites shortcomings and looking for ways to retain the new customers that daily deals attract and reward their existing customers.

Groupon Rewards will start with a limited launch in Philadelphia next month and then expand to other cities. Until businesses are using the loyalty program it is hard to know the limitations and successes Groupon Rewards will have. Groupon Rewards are unlocked when customers spend a certain amount of money specified by the business. The transactions are tracked by the credit card linked to the customers Groupon account and the customers are automatically notified when a reward has been earned. While this kind of loyalty program is not necessarily a new idea, it is simple for businesses and customers to understand and participate in.

Groupon Rewards is the third product offered by Groupon along with daily deals and Groupon Now, where businesses can set up real time deals. Whether or not this enhancement to Groupon’s services will help the company monetize daily deals will play out in the coming months. For now, I will admit that Groupon has silenced my criticism of their lack of loyalty and I look forward to seeing how Groupon Rewards fits in and changes the loyalty industry.

Groupon listened to its critics and responded with the missing piece to close the loop in their marketing efforts for businesses. Are you excited for Groupon Rewards? As a business? As a customer?