How does your retail store loyalty program work for you? What can you do to retain your customers? Two recent studies have some valuable ideas. Here's what you need to know about trends in loyalty programs, why loyalty programs are important and how to improve yours.
Benefits of the loyalty program
A good loyalty program has many benefits for businesses. According to Bond's Loyalty Report 2018:
- 77% of consumers say that loyalty programs make them more likely to stay with brands.
- 70% of consumers say that they are more likely to recommend a business with a good loyalty program.
- 63% of consumers say that they are changing their spending habits to make the most of their loyalty benefits.
Loyalty programs can not only boost customer loyalty, but also improve positive word of mouth for your store, and encourage customers to spend more on your business.
Trends in the frequent flyer program
First, the good news: the future of loyalty looks promising, according to the report of Oracle Retail 2018: The Loyalty Divide ]. More than 4 in 10 consumers aged 18 to 34 say they are more loyal to brands than they were five years ago. In addition, local retailers have an advantage in terms of loyalty: 82% of consumers say that the most important factor of loyalty is the proximity of stores.
Now the bad news: Oracle has found a mismatch between the way retailers and consumers view loyalty programs. More than half (58%) of retailers believe that their loyalty program offerings are most relevant to consumers. However, only 32% of consumers feel the same way.
Oracle's biggest problem is that retailers continue to measure the results of loyalty programs in purely transactional terms. For example, retailers tend to measure the success of their loyalty programs by factors such as the frequency of transactions, the frequency of visits, or membership in a loyalty card. Consumers, however, are also expressing their loyalty through word of mouth on social media, and businesses are failing to include social media advocacy as a measure of the success of their loyalty programs.
How to improve your loyalty program
What can you do to improve your store's loyalty program? Here are five steps you can follow based on these reports.
1. Hire your employees. Dealing with employees who are unfamiliar with the company's loyalty program is a major cause of member frustration, says Bond's report. Educate your employees on how your loyalty program works and its value to customers and your store. Remind your employees to encourage the use of the loyalty program, show members how to get the most out of it and thank them for redeeming rewards. Only 21% of the loyalty program members in the Bond report say they're currently being incentivized to use the program, and only 20% are getting help to make the most of their members, so there's has a lot of opportunities here.
2. Make it personal. More than two-thirds of Oracle report consumers are willing to share their preferences and purchase history, provided they offer more personalized loyalty offers. The more you can customize the rewards of your loyalty program to each customer, the better. For example, consider giving customers the option of accepting or rejecting loyalty program offers so that your loyalty program can learn which ones are most appealing. You should also make the information about loyalty programs available to your sales staff, so that he can quickly access each customer's personal preferences for better in-store service.
3. Consider billing it. Nearly four in ten consumers in the Bond report would pay for an improved membership level in a loyalty program. Among the millennia and younger, the percentage is even higher. (Think Amazon Prime.) Although this does not work for all retail businesses, consider the VIP benefits that your customers might be willing to pay. If you're not ready to directly bill a loyalty program, consider creating different levels of loyalty based on annual spend, like Sephora.
4. Go Beyond the Transactional. Store visits, dollars spent, and website purchases are just a few ways to measure loyalty, but there is more. Take advantage of the power of social media word-of-mouth to promote your retail store. For example, create a special Facebook group for loyalty program members. Consider offering loyalty points or rewards in exchange for members mentioning your store or products on social networks, or referring a customer who makes a purchase.
5. Make it easy to use. Buyers do not want to wait for months before reward points accumulate or jump through the hoops to redeem them. The more your loyalty program is easy to use, the more likely customers are to use it.
Want more ideas to improve your loyalty program? Bond's Best Loyalty Programs for 2018 include the Kroger Fuel Program, Speedway Speedy Rewards, Marriott Rewards, Papa John's Papa Rewards, Kohl's Yes2You Rewards, Walgreens Balance Rewards, Dollar Shave Club and Amazon Prime . Try joining one or more of the programs if you are not already a member, and see what you can do for your retail store.
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