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How Loyalty Programs Fuel Shoppers’ Love Affair with Brick-and-Mortar Retail

Your current, loyal customers are worth fighting for, and the right loyalty program can help you win the battle. They are the segment of your customer base that represents the most profit. Market research shows 80% of a retail chain’s business comes from the loyal 20% of its customer base, so retaining them could be the difference between success and failure.

Regardless about what the media says, shoppers’ love for brick-and-mortar stores continues. North American consumers still make the majority of their purchases — more than 90%, in fact — in brick-and-mortar stores, even though our 2016-2017 Great Omnichannel Expectations Shopper Survey reveals that more than 90% of them now say they shop on multiple channels. The “relationship” loyal shoppers have with physical retail stores uniquely meets their needs to be able to see, feel, and try before they buy, so it’s likely a long-term one. But like any relationship, you have to work at it, and building a great loyalty program can help keep customers coming back to your physical stores.

The Building Blocks of Loyalty

Your customer loyalty program, like any successful business initiative takes strategy and planning to ensure long term success. Evaluate the best way to award points, considering your niche and your customer base. It is also crucial that the program is user-friendly and easy to understand. Remember, it’s all about rewarding the loyal customer, so it should be designed primarily with their needs and preferences in mind.

To implement a successful loyalty program, you need the right loyalty solution to track spending or purchases, award points, and redeem them. It should be integrated with your other store systems, enabling the cashier to access loyalty program information from the point of sale (POS) and apply them to purchases. When points are earned, your loyalty program should be able to automatically send an email informing the customer. These processes should be seamless and accurate to meet customer expectations.

Loyal to the Local Store

Brick-and-mortar stores can offer something that other channels cannot: one-to-one, face-to-face service. Consider tying this advantage into your loyalty program to encourage in-store shopping. Our survey found customers do not find replacing discounts with experience-based rewards, so it’s probably best to supplement the program with services rather than make them the rewards themselves. You can do this in a variety of ways, including:

  • Offer special services for loyalty program members such as free gift wrapping at the holidays or on Mother’s Day.
  • Add double rewards points for shopping during special sales or events, which can create urgency to bring them into the store at certain times.
  • Play up what attracted the customer to you in the first place. For example, if you are a book seller, consider letting loyalty program members be first on the list to get a new release; if you are a jeweler, provide free inspections and cleanings; if you sell hardware, give loyalty program members exclusive access to a DIY hotline.

Whatever you promise, come through with enthusiasm and style. Back everything you do with service aimed at building true relationships.

The Secret to Love that Lasts

Probably the most important thing you can do to retain loyal customers is to never stop trying to make your loyalty program better. It may be working today, but it may not tomorrow. Periodically evaluate how well your program is performing, make adjustments, and be prepared to adapt to change.

Do everything you can to make sure your loyal customers love shopping at your stores and download our 2016-2017 Great Omnichannel Expectations Shopper Survey to learn more about trends that shoppers look for today in the retail experience.

Customer relationships are like any other. They take work. Build a great loyalty program to keep them coming back. – Paula Da Silva, CitiXsys @iVendRetail_NA

Senior Vice President of Sales from CitiXsys, Paula Da Silva is an avid trainer and executive coach. She has presented keynote speeches, workshops, and seminars in 8 countries on four continents. Her high quality, high content, high energy programs are well researched and delivered in a down to earth style that everyone will remember.

Paula Da Silva

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