Loyalty program benefits
A good loyalty program has many benefits for businesses. According to The Loyalty Report 2018 by Bond:
- 77% of consumers say loyalty programs make them more likely to stay with brands.
- 70% of consumers say they are more likely to recommend a business with a good loyalty program.
- 63% of consumers say they change their spending habits to make the most of their loyalty benefits.
Loyalty programs can not only make shoppers more loyal, but also improve positive word-of-mouth for your store, and get shoppers to spend more at your business.
Loyalty Program Trends
First, the good news: The future of loyalty looks promising, according to Oracle’s report Retail 2018: The Loyalty Divide. More than 4 in 10 consumers aged 18 to 34 say they are more loyal to brands than they were five years ago. What’s more, local retailers have an edge when it comes to loyalty: a whopping 82% of consumers say the most important factor in loyalty is store proximity.
Now, the bad news: Oracle found a discrepancy between how retailers and consumers view loyalty programs. More than half (58%) of retailers believe their loyalty program offers are most relevant to consumers. However, just 32% of consumers feel the same way.
The biggest problem Oracle found is that retailers are still measuring the results of the loyalty programs in purely transactional terms. For example, retailers tend to measure the success of their loyalty programs by things such as frequency of transactions, the frequency of visits or loyalty card membership. Consumers, however, are also expressing their loyalty through social media word-of-mouth, and businesses are failing to include social media advocacy as a yardstick of their loyalty programs’ success.
How to Improve Your Loyalty Program
What can you do to improve your store’s loyalty program? Here are five steps you can take based on these reports.
1. Enlist your employees. Dealing with employees who aren’t knowledgeable about the company’s loyalty program is a top cause of member frustration, says Bond’s report. Educate your employees about how your loyalty program works and its value for customers and your store. Remind your employees to encourage the use of the loyalty program, show members how to get the best results from it, and thank them for redeeming rewards. Only 21% of loyalty program members in the Bond report say they currently get prompted to use the program, and only 20% receive help to get the most from their membership, so there’s a lot of opportunities here.
2. Make it personal. More than two-thirds of consumers in the Oracle report are willing to share their preferences and purchase history as long as it results in more personalized loyalty offers. The more you can personalize your loyalty program rewards to each shopper, the better. For example, consider giving shoppers the ability to accept or reject loyalty program offers so your loyalty program can learn which are the most appealing. You should also make loyalty program information easily available to your sales staff, so they can quickly access each customer’s personal preferences for better in-store service.
3. Consider charging for it. Almost four in 10 consumers in the Bond report would pay for an enhanced membership tier in a loyalty program. Among millennials and younger, the percentage is even higher. (Think Amazon Prime.) While this won’t work for every retail business, consider which VIP perks your shoppers might be willing to pay for. If you’re not willing to outright charge for a loyalty program, consider creating different loyalty tiers based on annual spending, like Sephora does.
4. Go beyond the transactional. Store visits, dollars spent, and website purchases are a few ways to measure loyalty, but there’s more. Take advantage of the power of social media word-of-mouth to promote your retail store. For example, create a special Facebook group for loyalty program members. Consider offering loyalty points or rewards in return for members mentioning your store or products on social media, or for referring a customer who makes a purchase.
5. Make it easy to use. Shoppers don’t want to wait months for rewards points to accumulate or jump through hoops to redeem them. The more effortless your loyalty program is to use, the more likely customers are to use it.
Want more ideas for improving your loyalty program? Bond’s top-ranked loyalty programs for 2018 include Kroger Fuel Program, Speedway Speedy Rewards, Marriott Rewards, Papa John’s Pizza Papa Rewards, Kohl’s Yes2You Rewards, Walgreens Balance Rewards, Dollar Shave Club and Amazon Prime. Try joining one or more of the programs if you aren’t already a member, and see what you can adapt for your retail store.