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How to improve your loyalty program during the holiday season

Loyalty programs are some of the most reliable ways retailers – from grocery stores to home decor  – reward customers for their patronage. And if there’s ever a good time to have one in place, it’s during the holiday season, when purchases ramp up. That’s certainly been the case this year. Although more concrete data will be available when Christmas wraps up, the shop ’til you drop period got off to a bustling start, according to estimates from the National Retail Federation. Approximately 165 million Americans shopped online or in brick-and-mortar store locations during Black Friday weekend.

But it’s not enough to merely offer loyalty programs to your regular clientele – it’s crucial that those programs feature the type of perks customers want most. Doing so can really pay off – quite literally – furthering the earnings goals of point of sale providers and other contributors along the supply chain.

“75% of customers seek to be rewarded above and beyond their end purchase.”

Loyalty and point programs are pretty simple in practice. They incentivize customers to buy more in order to earn discounts, rebates, exclusive offers, free products and other perks. The vast majority of Americans feel like they deserve it, too. In a 2017 study conducted by HelloWorld, 3 in 4 consumers acknowledged a desire to be rewarded above and beyond their purchase.

Additionally, when implemented effectively, loyalty programs pay dividends. More than 80 percent of customers agree that such initiatives prompt them to buy more frequently, according to a separate analysis conducted by Brand Loyalty in collaboration with Visa. In addition, 73 percent said they’d be more likely to recommend brands to friends and family if the loyalty programs were worthwhile.

 Customers looking in the store window

Room for improvement

Establishing the types of rewards that buyers truly want can be a difficult process for retailers. Indeed, only 36 percent of respondents to the “Battle for Love & Loyalty” report said they were very satisfied with the customer support offered by the  programs they belonged to. 

Michela Baxter, senior director loyalty at HelloWorld, said part of the problem stems from the fact that virtually every company these days has a loyalty program of some kind. So for some consumers, they’ve lost their novelty.

“As programs become ubiquitous, brands across industries must devise ways to connect with consumers and create experiences that directly correspond to their needs,” Baxter advised.

Here are a few ideas that can help you hone your loyalty program so it’s a true home run to your customer base:

Go beyond ‘spend and earn’ formula

Just about every loyalty program entails a spend and earn model – the more members spend, the more they get, whether it’s free merchandise, a certain percentage off with each purchase or a free meal at a future date, as may be case with restaurants. Think about alternative ways customers can accrue points.

For example, as HelloWorld found in its polling, 75 percent of respondents wanted to be rewarded for their time and energy, such as watching a video or downloading an app. Time is a form of currency and this is something that customers feel should be recognized.

Make it fun

Americans thrive on competition, particularly the good-natured kind that isn’t too serious. Retailers may want to take advantage of customers’ attraction to recreation by including games or contests in their loyalty programs. Customers may vie against one another or form teams to see which one ends up with the most points to go toward the purchase of a worthwhile service or item. Just make sure that the payoff is truly rewarding.

Give members the red carpet treatment

While membership-only loyalty programs incentivize customers to buy, members often don’t feel like they’re getting the types of benefits that set them apart from those who haven’t joined. Just 22 percent of program participants said the perks they received justified their membership, meaning the rewards were not seen as significantly better than those of non-members. Whether it’s deep discounts or exclusive sales events, see to it that the perks loyalty program members receive set them apart. Doing so encourages more people to sign up.


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