Creating A Retail Loyalty Program Strategy? Use This Checklist
Developing a retail loyalty program strategy is a great best practice for encouraging repeat business. However, to be successful, loyalty programs require a structure that best fulfills the needs of your customers.
This checklist of retail loyalty program tips will help you to create a program that conveys value and encourages customer spending.
Offer monetary or convenience incentives: You first want to put yourself in your customers’ shoes and ask, “Why would someone want to join this loyalty program?”
That’s where providing incentives comes in. Most think of incentives as monetary, such as in the form of discounts or coupons. But convenience is also an incentive. For instance, a loyalty program mobile app could have a feature that allows users to create a shopping list of products, find out whether an item is in stock and identify the aisle location of an item.
Entice with initial and ongoing incentives: In addition to highlighting the benefits of a loyalty program, retailers should also offer initial and ongoing incentives that encourage spending.
For example, stores could provide a 10 percent discount when a customer signs up for the rewards program upon checkout. That helps shoppers to see immediate savings.
In addition, you should always put in front of the customer ongoing incentives to spend and earn loyalty rewards. A coffee loyalty rewards program at a convenience store might use store receipts to remind customers about the number of coffee purchases they need to make before earning their next cup of free coffee.
Sometimes loyalty programs offer thousands of rewards, but the key is to show immediate or short-term gratification, which will encourage repeat business and highlight the loyalty program’s value.
- Make your loyalty program different from your competitors: Loyalty programs are another way to stand out from competitors that sell similar brands and product styles. For example, a medical uniform retailer could encourage customers to redeem their uniform vouchers at its store by offering extra discounts on purchases when they join the loyalty program. Other ways to stand out from competitors include allowing loyalty customers to shop at earlier hours or order new products before they hit store shelves.
- Treat your loyalty program as a marketing channel: Loyalty programs not only encourage repeat business, but if done right, these programs will attract new customers. Treat your loyalty program as a built-in marketing channel that pushes promotional offers and creates buzz. This empowers your loyalty program members to serve as brand ambassadors who encourage their friends to join, thus building your loyalty customer base.
Decide the primary method to get customers to join your loyalty program: While customers should be able to manage their customer loyalty account through multiple channels, retailers must decide the primary channel for initial sign-ups.
Some retailers have their customers sign up by downloading a mobile app. If you’re going to use mobile technology, ensure that your store checkout systems are able to redeem loyalty reward points or coupons displayed on a customer’s smartphone. Often, retailers provide loyalty program customers with plastic cards or key rings that track loyalty points and coupons earned when swiped at the register.
No matter what sign-up method you use, the key is to make it easy to get the loyalty program card or mobile app into the customer’s hands. That might mean not requiring a customer’s personal information at the initial sign-up. The barcode on a plastic rewards card could at first identify the customer simply as “member 101,” for instance. Later, you could offer a promotion that requires customers to enter more personal information before they’re allowed to redeem the incentive.
This checklist should help to minimize the trials and errors when creating a new loyalty program. In the end, having a retail loyalty program strategy that will generate repeat sales is vital for success.
Author: Wm. Matthew Street, Solutions Consultant/Retail Product Lead at ArcherPoint
To learn more about loyalty programs, schedule a demo of ArcherPoint's Retail Management Solutions.