Summer 2014
Thank You, Come Again By Lynn Switanowski Barrett

In the spring issue of GIFT SHOP, we discussed the basics of a loyalty program. Here are some ideas for how you could implement and market one.

While independent retailers like you have traditionally had the advantage of a one-on-one relationship with customers, in the ever-growing world of social media, even big brands are now able to connect on a very personal level with every customer by tracking data, shopping habits and most important, offering personal rewards that speak directly to their needs.

How can you respond to these changes? The savvy independent retailer understands that every customer must be appropriately courted and thanked after every transaction and that the smallest purchase can no longer be taken for granted. A customized loyalty card program is one potential solution.

Simply put, a loyalty card program is a way for retailers to create a long-term marketing effort that provides offers, rewards and incentives to repeat customers who continue to return and make purchases on a consistent basis. This repeated loyalty drives regular sales and often creates word-of-mouth marketing from the well-rewarded customer.

The out-of-pocket costs can vary based on the offer provided, but certainly can be built into any business model as a marketing cost for which every store—new or old—should have a budget.

The whys

There are several key reasons why a loyalty program might work for your store.

First and foremost, it’s a way for you to say thank you – in ways both small and large – to your most loyal customers each and every time they interact with you. You can do so either in store or via your marketing communications.

Additionally, a loyalty program encourages customers to return – often. Having a card in their wallet that “reminds” them they are close to earning a reward can be exactly what your store needs to influence your customers to turn the car into your parking lot and make another purchase.

It is a form of low-cost advertising. Customers see your name on the loyalty card when they open their wallet or when they check their email. It’s an effective and inexpensive method for staying front and center of your most important customers.

A loyalty program can help you gather key information. By using one that is monitored via software and linked to your POS system, you can collect valuable metrics to learn more about your customers and customize your offers and sales accordingly.

The whats

There are various different types of offers you can use to incentivize customers to purchase regularly from you. Try one, try them all and vary them over time to keep customers interested. The key is to pay attention to which offer works best and use it to grow the program and to reward loyalty in the way the customer wants.

Buy Ten, Get One Free
This is the method used most frequently and is quite simple to administer and can be effective if the goal is seen as reasonable and attainable by your customers.

Discounts
Another offer that might work for your loyal customers is to offer a discount for purchases over a certain amount. This can be a great way to work on growing your average sale and can be a useful selling tool for associates to get more add-on sales during a transaction.

Advance Purchases
Small business owners can offer their regular customers an incentive to buy gift certificates or gift cards in advance. This can work effectively during slow sales time periods to generate cash without an inventory investment.

Contests
Run regular contests to generate customer engagement with your website and social media platforms. This helps your search-engine ranking and gets engagement from your best customers (and it might remind them to shop sooner than they had intended).

Marketing loyalty

You can have the best loyalty program with the best incentive, customized offers targeted to customer purchases, but if you never tell your customers that you have a loyalty program and remind them to use it – it will all be for nothing. Try some (or all) of these ideas when marketing your loyalty program to customers both old and new:

  • In-store signage
  • Register receipt reminders
  • Email signature link
  • Email notification of program offers/updates on a consistent basis
  • Website notification of program
  • Information about program on social media pages— both in content and with regular posts about program
  • Testimonials from customers who use program often
  • Include program in traditional marketing materials—newspaper, radio, television, magazines, etc.
  • Launch program with press releases to major release sites

As your shoppers become more educated and savvy, consider revising your marketing initiatives to keep pace with technology trends and evolving shopping behaviors. Only then will you be able to garner long-term engagement and loyalty.

The key to making a loyalty program work is to customize it for your store and shoppers. Show your customers that you know what they like and that you know what they want as a reward for their loyalty – and they will continue to reward your store with sales for years to come.

Lynn Switanowski Barrett

Lynn Switanowski is founder of Creative Business Consulting Group, a Boston-based retail consulting firm. The consulting group works with retail businesses to create and implement profit-improving sales, marketing, and inventory management strategies. For more information, call 617.437.9191 or email lynn@cbc-group.net.




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