Letting your customers know that you appreciate them is good business practice and almost reason enough to implement a loyalty program. The added bonus of gaining key personal details on your buyers for use in future strategic marketing plans, if implemented properly, make it a sure fire winner.
“Customer loyalty is arguably the greatest asset in the business; loyal customers provide repeat business, and equally importantly, new customer referrals,” reports the Australian Centre for Retail Studies at Monash University in their whitepaper, ‘Towards customer loyalty: Strategic differentiators for success.”
Myer operates one of Australia’s most successful and well run loyalty programs with last year’s financial results revealing 70 % of their total sales were made by customer loyalty program members. Myer uses the valuable data provided by over 5 million MYER one card members, to monitor and evaluate key aspects of their operations performance in areas including stores, products, brands and marketing.
“We continue to focus on customer engagement and retention by acknowledging and rewarding our most valuable members as well as targeting customers with relevant offers. We have a pipeline of further enhancements for our MYER one loyalty program as it is a key competitive advantage providing incredible insights through sophisticated data analysis”, says Myer CEO, Bernie Brookes.
Loyalty programs have obviously been profitable for many retailers but unless they are well planned and executed appropriately they won’t succeed.
“The loyalty program has to be more than just discounting, it has to have some form of value-add like a VIP program. We have also found customers were not dissuaded from dealing with a retailer if there wasn’t a loyalty program; it was more of a motivator if there was one. Where loyalty programs tend to be most successful is where they are linked to other offers, so the customer gets broader value,” Founder & CEO of the Retail Doctor Group, Brian Walker advises in SmartCompany.
Tips to help you to create a profitable loyalty program relevant to your business:
- Work out which type of program you want to set up
- Points based with in-store redemption,
- With affiliate program partners – engage and manage program affiliates, a key factor used in other successful rewards programs such as Qantas Frequent Flyer and Coles FlyBuys. Your customers will connect and appreciate the program more due to having multiple places to redeem & earn points while you also gain greater recognition through your affiliate partner.
- Design the program structure concerning points, rewards and possible tiers; what the points will be worth and determine how customers will earn points i.e. spending $10 in store earns them 1 loyalty point.
- Consider other strategies – other than discounts and points – such as VIP exclusive events.
- Make sure your technology will effectively support the loyalty program. Use POS software capable of allowing customer’s to redeem points immediately at POS. Your POS system should capture relevant information on your members purchasing activity. Use other online initiatives such as a Store App to provide members with mobile access to their rewards card balances and send notifications regarding upcoming events and sales.
- Advertise the Loyalty Program (in store and externally) clearly stating the benefits – make sure all staff are trained to understand the value and promote the program to customers in store.
- Collect and use customer data (make sure you follow Privacy Laws). The customer and behavioural data is the most valuable reward of a loyalty program – make sure you use it to make better business decisions.
- Encourage customers to come back into store to spend/redeem points. Communicate via multiple channels such as SMS, email newsletters, mail out offers and social media. Research gained in a ‘Consumer Study into Australian Loyalty Programs’ report by digital agency Citrus and marketing company Directivity found 67% per cent of respondents rated surprise gifts or rewards as important, while 64% enjoyed exclusive offers available to members only.
The priceless benefit of having strategic and timely personal interactions with customers which loyalty programs provide is one of the most effective tools a retail business can utilise to build strong customer relationships, inform better operational decisions and enjoy continued success.
Visit www.retailexpress.com.au or call 1300 732 618
Aaron Blackman is the CEO of Retail Express. Follow Aaron on Google+