Measuring & Rewarding Customer Loyalty
Loyalty programs have a direct, measurable impact on customer retention. In fact, according to eMarketer, 83% of loyalty program members claim that rewards incentivize them to do business with a particular brand. By implementing a smart loyalty program steeped in tech, you can both collect data to measure customer fidelity and reward those customers through various programs.
Let’s take a closer look at these two facets.
Track customer behavior by putting into place a loyalty scheme that functions in tandem with your point-of-sale (POS) system. Data points include how much money loyal customers spend, frequency of visits, and products of interest. These figures should be presented in easily readable reports that offer vital statistics at a glance. Occasionally, assumptions about valued clients prove to be totally false: customers might spend more than a business owner conjectures, or they might be inclined to buy heavily during a certain season.
A loyalty program should accommodate customer classification by spend and purchase frequency. Pinpointing buying behavior means you can craft promotions tailored to each category of client, which makes for incredibly effective marketing.
Channel promotions through your loyalty program, dispatching VIP customers a text message or email when you’re throwing a flash sale or hosting an exclusive event. Scheduling these marketing ploys in advance helps drive business and increase retention.
The most common rewards programs incorporate gift cards and customer rewards cards. In the case of the former, the merchant is ensuring return business, procuring the money upfront – even if the card goes unused, there’s no loss! Statistically, the cardholder is likely to make a larger purchase with a gift card, effecting a cash or credit payment to lock down a more expensive item. Alternatively, the customer can spend the exact value of the card, rendering a mere time gap between payment and transfer of goods. POS systems can be configured to process gift cards, swiping them like typical magnetic stripe credit or debit cards.
Rewards cards can boost loyalty by allowing customers to amass points for purchases and earn savings or gifts as they spend. In a retail context, cardholders can qualify for special price reductions on select items. POS systems capture customer profiles, so they can effortlessly keep tabs on a cardholder’s expenditures and authorize new discount levels or gifts per system settings.
Chronicling customer purchase history translates to targeted marketing media. At a supermarket, for example, a customer at the checkout stand might be issued a receipt with coupons on the reverse side for items of potential interest.
Another form of loyalty reward is access to an event or experience. You might invite the customer to choose between several different events commensurate in monetary value. This type of reward demonstrates a desire to connect personally with your VIP customers rather than fixate solitarily on generating more sales of your own products. Indeed, it is this extra effort that builds long-lasting, meaningful relationships.
Contributed by Danielle Issa.
Image source: constructionworld.org