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Debunking 6 Myths About Loyalty Programs

Debunking 6 Myths About Loyalty Programs

In retail today, we tend to think that shopping is easy. But with so many choices of brands, products and promises, it’s anything but easy!

Take toothpaste. “Whitening. Brightening. Lightening. Spearmint. Peppermint. Natural. Organic. Travel Size. Purse Size.” With as many as 400 types of toothpaste sold at retail at any one time, no wonder shoppers are confused.

This makes true customer loyalty hard to achieve. How do you get an engaged consumer who feels that he or she is valued when they revisit your store again and again?

An effective loyalty program can make customers ambassadors of your product or services. Unfortunately, it’s an often-misunderstood part of retailers’ customer engagement strategy.

While there are too many myths about loyalty programs to address in one blog post, I’ve chosen six of the most popular ones to debunk:

  • MYTH 1: The Lost Margins From Offering Substantial Rewards Will Outweigh Any Of The Benefits. This is the “800-pound gorilla” of myths. Each retailer is different, of course, and each needs to carefully consider their business reality. If you’re a skeptic, you may be surprised to learn how the little things that require a small investment but add value – a free perk here, an extra point earned there – can go a long way to keeping customers happy and loyal.
  • MYTH 2: Simply Offering More Valuable Rewards Than Your Competitors Is Enough To Be Debunking 6 Myths About Loyalty ProgramsSuccessful. While retailers should certainly offer rewards that are at competitive levels with other retailers, the monetary value of rewards is just one piece of the puzzle.
  • MYTH 3: There Is A One-Size-Fits-All Blueprint For Success With Loyalty Programs. This is one I hear a lot. In fact, the most successful loyalty programs are unique and align well with your brand. Maybe one of the values of your brand is helping others. You can offer customers rewards for demonstrating acts of kindness on social media channels. Be willing to experiment. Your customers who participate will feel a closer association to your brand.
  • MYTH 4: A Loyalty Program Can’t Help Prevent Shoppers From Using My Store As A “Showroom.” Keeping purchases happening in your store at a time when shoppers can easily check prices at Amazon or another competitors’ website on their smartphone isn’t easy. Hitting loyal customers with personalized, exclusive offers that tie to their previous purchases when they walk into your store sends a message that you understand and value them. Loyalty programs can be just as effective as having knowledgeable store associates and a unique store experience in combating showrooming.
  • MYTH 5: Loyalty Programs Are Hard To Manage. This myth is actually partly true for retailers who don’t have the right tools at their disposal. However, implementing a loyalty program that is integrated with a point of sale or retail management solution can make it easier for retailers to manage. It can also give them more insights into customer shopping and buying behaviors, and allow them to offer more personalized rewards and offers.
  • MYTH 6: Loyalty Programs Make The Checkout Process More Complicated. The old days of rummaging through your wallet or purse to find the right paper loyalty cards to redeem points are virtually gone. With mobile payment apps and digital passes that keep all of a customer’s loyalty cards, coupons and gift cards in one place, it’s much easier and quicker for customers to get rewarded at the point of sale. Launching a mobile POS in your stores, integrated with your loyalty program, can simplify and quicken the checkout process even more.

When you consider that a repeat customer spends 67 percent more than a new customer (according to a BIA/Kelsey and Manta joint report), building a strong and loyal customer community needs to be among retailers’ top priorities.

By putting these myths aside and developing a loyalty program that truly makes customers feel valued, you can ensure your customers will come back to their store, spend more, and think more highly of your brand.

Tim Barton brings more than 30 years of leadership and consultancy experience in retail, working in environments of scale, high complexity and fast pace. Previously working with River Island, Boots, Ann Summers and Berry Brothers & Rudd, his extensive domain expertise lies in the operational implementation of complex business change programmes, business process improvement and retail technology.


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