- By Carla Bragagnolo
On average, it costs $10 to acquire a new customer in the retail industry. At first glance that figure seems low, but if that new customer only comes to your store once and spends 9$ it can be detrimental to your bottom line. While gaining customers is essential for any retailer, retaining them is just as – if not more – important. A 5% increase in customer retention can lead to a 25-100% increase in profit for your company. A retail loyalty program is an excellent way to ensure your hard-earned customers keep coming back. Below, we highlight the qualities that make loyalty programs successful and how they help retailers increase ROI.
1. Retail Loyalty Programs help retailers get to know their shoppers
A loyal customer only spends about 50% to 70% of their monthly budget with that merchant, according to Precima. By gathering information on returning shoppers you can learn invaluable insight into their shopping habits that will help you increase the amount they spend with you. By knowing which products your customers purchase most often, you can improve your target marketing which will also lead to improved open rates and click through rates. When you reach out to shoppers with sales or rewards which benefit them, they will start to love seeing your brand’s logo flash across their smartphone’s lock screen or appear in their e-mails. If you are able to acquire information on your shoppers at scale, this big data can even be very valuable to suppliers like Proctor and Gamble, or Nestle.
2. They help retailers connect to shoppers in the right place at the right time
Loyalty programs have moved far beyond email marketing and plastic cards. The most sophisticated loyalty programs today deliver coupons to shoppers via smartphone, often when the shopper is right in the aisle. The trick is to blend technology with the retail experience to offer targeted coupons in a seamless way. You can do this through push notifications, or combining beacons with geofencing.
3. They showcase your Brand’s Personality and create experiences
A successful retail loyalty program will go beyond a simple points system. The program should be knit from the fibres of your brand promise while simultaneously providing value to your shoppers. The future of retail is creating a personalized experience for your customers. By rewarding something more than “Buy 10 get 1 free” your loyalty program can build a stronger relationship with your clients, and as a result, your profits will increase. For an example look to Nike, who includes personal trainers and exclusive shoe trials as part of their retail loyalty program.
By ensuring retail loyalty programs are useful to customers, and by using technology to connect with shoppers in-store, your loyalty program will lead to an increase in ROI. For more online marketing tips for retailers, sign up for our weekly newsletter.