Too often small and independent retail businesses create and run shopper loyalty programs that mimic their big business competitors. They ignore that the big business loyalty programs do not have rewarding shopper loyalty as a core focus.
Big business loyalty programs are primarily about the needs and profitability of the big business running them. Too often, they do not offer a real reward for loyalty.
Our advice for small business retailers is to be generous with your loyalty program.
Offer generous rewards for loyalty. Run a loyalty program shoppers love, a program that brings shoppers back again and again.
It is called a loyalty program after all. Show your customers you appreciate their loyalty.
Being stingy will cause frustration and anger among customers, it could have them talking negatively about the business. This is not good for business.
When we look at loyalty programs that have failed to deliver good results in a small or independent retail business, the most common cause we find is that the loyalty reward is not sufficiently a reward.
This is why we encourage retailers to be generous in loyalty reward settings.
The best way to reflect generosity is through transparency of value. By this we mean making it clear what a reward is worth. This is why a dollar amount is more valuable than points. People understand dollars. It is unlikely the will easily understand the ‘value’ of points.
While the Tower Systems software offers multiple loyalty programs and options, our recommended approach is discount vouchers. It is easy to setup, easily understood by shoppers and genuine in the reward.
Showing $$ value on receipts in the form of a voucher that can be spent presents immediate in-store opportunities as well as after the visit opportunities. Our research indicates an average redemption of 20% of all vouchers issued and a total net cost to the business of around 1% of turnover for, usually, a 8% to 10% bump in sales.
For more advice and assistance on the best-practice approach to shopper loyalty, please talk with the team at Tower Systems.
This general retail business advice is another example of the type of advice Tower Systems provides its customers, to help beyond our POS software.