January 25, 2017
The three key factors to building customer loyalty in retail
By Mandy Hawkins
80% of sales come from 20% of your customers. Building a better retail customer loyalty program is essential to your success (1). Happy customers loyally return. And happy customers are likely to tell their friends and family about their satisfaction.
However, with nearly every retailer offering a loyalty program, how do you set yourself apart?
The average American is enrolled in 29 loyalty programs, yet actively uses only 12 of those (2). It’s apparent that customers want (and deserve) a better loyalty program. Here are the three key factors necessary to building customer loyalty for your retail brand.
Make the entire experience highly personalized.
At every step in the customer’s journey, personalization is the key to a better experience. Start with communication and end with gratitude. Customers want to you know care about their individual needs. Leveraging data helps you understand exactly what those needs are. Understanding leads to a higher level of customer loyalty.
Personalization at Work: CVS’s Extra Care Rewards Program offers members coupons based on their shopping history. They make tracking those perks easy. Customer can use the scannable card or the mobile app. All purchases and rewards are intuitively stored and used to personalize special offers. CVS has even placed Extra Care Coupon Centers in stores. Customers can scan their phones and see what coupons and special offers are available during their shopping experience.
Try This: Acknowledge who your customer is. Find out what they like. Thank them in the ways that matter most to them.
Give your loyal customers special rewards.
Who doesn’t want to be treated like a VIP? Loyal customers want to feel special. Let them be the first to know about new products and upcoming deals that matter to them. They will be delighted over sneak peeks. Members-only events will make them feel you’ve rolled out the red carpet in their honor. Another way to leverage data is by recommending products that would enhance their previous purchases. This kind of special treatment exceeds the customer’s expectations.
Rewards at Work: Sears FitStudio can hardly be described as a rewards program. Instead, FitStudio is seen as a fitness destination. It offers free workouts, informative articles geared towards the customer’s health and nutrition goals, and personalized deals of the day. Rewards go beyond customer spending. Points for Progress rewards customers for physical activity as well. Matt Wise, CEO of Hello World, states that loyalty programs are the “central engagement hub for consumers” (3). Sears FitStudio certainly demonstrates a central location for customers to engage far beyond savings and rewards.
Try This: Treat your loyal customers like A-Listers. You’ll create a community that goes beyond a simple rewards system.
Offer clients more with mutually beneficial partnerships.
By studying the customer’s level of involvement across multiple channels, your brand has the ability to partner with complimentary businesses. You can offer your customer even more reasons to remain loyal.
Partnerships at Work: Safeway customers can use the money they spend on groceries to receive a discount at the pump. For every $100 spent, customers receive a discount of 10 cents/gallon. For every $200, they’ll get 20 cents off. Customers love the opportunity to save in two places where they most frequently spend money. American Express’s Plenti program allows customers to pool savings. Participating retailers such as Macy’s and Rite-Aid give customers a broader opportunity to earn rewards.
Try This: Listen to your customers. Offer them flexibility. Let them earn and save beyond a single transaction point.
Customers love being rewarded. Those rewards must be meaningful in order to keep them engaged. By personalizing the experience, offering special privileges, and partnering to offer additional savings, you can build a retail customer loyalty program that works.