Customers love loyalty programs. This is a long-standing tradition and has only evolved with new technologies. Many times loyalty programs are tailored to each store’s primary audience to both increase engagement and for customer retention. They bridge the relationship between the retailer and the consumer shopping/buying process. Now it’s time for organizations to leverage loyalty programs. A recent infographic by Selfstartr showed how loyalty programs are on the rise. The average number of loyalty programs per household was up 13.3% in 2015, increasing from 10.9% in 2014, and they are even popular with affluent shoppers.
- 71% of shoppers making an annual income of $100,000 or more are enrolled in at least one loyalty program.
- 76% of shoppers believe that loyalty programs are part of their relationship to the brand
Benefits for shoppers The benefits of loyalty programs goes both ways. They give shoppers the opportunity to show retailers their preferred buying process, creating a more personalized experience. They give brands insight into all kinds of shopper data which helps them provide better recommendations, better offers and the opportunity to nurture customer relationships.
Leverage loyalty programs and succeed So how do you leverage loyalty programs to make retail businesses more profitable?
Focus on consumer engagement. No matter how tempted you are, don’t make your customer loyalty program about transactional rewards like discounts or spending to a threshold to incent consumers to your program. Using engagement metrics like number of buys (even if they are small) helps avoid the two-year burn out that 77% of loyalty programs encounter. Using engagement tools to drive consumer loyalty will keep them returning for the long haul. Engagement immerses consumers in your brand, making them familiar with the store, the brand and eventually the promotional patterns. You can get consumers into promotional cycles by exposing them to the brand more often. This avoids common and often costly promotions, like requiring a minimum purchase to take advantage of loyalty rewards. For retailers, longevity should be prioritized over temporary loyalty.
