Customer Loyalty Programs

One reason is return business. Another reason is that one customer will tell 15 other people about the business. That means if they had a good experience, you could have 15 new customers. If they had a bad experience, you could lose 15 possible customers. That's the theory I was taught anyway.

You need to clarify your question, specifying what you mean by "Loyalty (capitalized) programs".  Obviously a loyal customer is a repeat customer and will give positive feedback to others looking for your type of product or service.  But, if you mean how various Loyalty-generating efforts enhance a business, you need to identify the program or method.  Locally, I see barbershops using punch cards to give the customer a free haircut after getting 10 paid ones, restaurants giving 2 for 1 entrees or % off the total bill (Denny's, IHOP), and Safeway food stores and CVS issuing discount cards and cash-back offers. Resubmit a more fleshed-out question along with a description of your own level of expertise so that responders know how to answer your question and meet your needs.