For years, retailers, especially independent and small business retailers, have been told to follow retail giants and reward loyal shoppers with points that can be redeemed for gifts and discounts.
Dutifully, many small business retailers acted on this – but without a thought-through strategy to achieve the best outcome for the business.
Without a financially rewarding outcome for a business, a loyalty program is worthless.
This is why retailers, in any retail channel and in any retail situation – high street, shopping mall, rural and or regional – need options in terms of shopper loyalty rewards. It is why Tower Systems offers valued options in its Point of Sale software.
While a points based program is useful, it could be that the business will benefit from a different approach.
Good POS software will offer flexibility. This flexibility can add thousands of dollars to the bottom line performance of a retail business each year.
The Tower Systems Point of Sale software supports multiple loyalty options that include: a traditional points based approach, interfacing to the respected Vii Accumulate loyalty platform, interfacing to the equally respected Transactor loyalty platform, interfacing to Flybys NZ and offering a unique and flexible front end loyalty solution.
Having so many options available provides Tower Systems retail partners with commercially valuable flexibility.
The loyalty platform selected by a business depends on the needs of that business. A business that chooses POS software without broad flexibility will be limited in what they can achieve for their business with their software.
Big system interfaces
Vii Accumulate – used by Qantas, BankWest, Clipsal and others – and Transactor – used by Westfield, Amcal, Goldmark, Prouds, Avanti, Subway and others – are both used by retail banner groups and national retailers to connect stores allowing point accumulation and redemption in any location.
The Tower Systems approach with these two platforms delivers maximum flexibility for the retailers and banner groups. Through our seamless interface you have access to the facilities of either Vii Accumulate and Transactor.
Groups with as few as four retail locations could benefit from either interface.
The traditional points-based approach
In the Tower Systems software, retailers can accrue points for customers easily.
This is done by customers presenting a loyalty card, usually called a VIP card, at any time during a sale.
This is the easiest loyalty program to setup in a small or independent retail business.
The software accrues points according to rules established by the business owner. Points can be used by customers to access rewards. They can also be used to generate gift vouchers for shoppers based on points accrued.
Many retail businesses using the Tower software use the points-based loyalty facilities to encourage shoppers to spend more.
Shopper loyalty is much desired yet harder to achieve in this world with more competition, more loyalty options and a greater desire for instant gratification.
Following carefully assessment of international trends and looking thoroughly at how large and national retailers used primarily points-bases systems to drive loyalty, Tower Systems invested in an alternative, a new software based facility to reward loyalty for an often forgotten shopper.
Change the game: front-end loyalty
By using an approach we at Tower call front-ending loyalty, retailers can achieve more from first-time and infrequent shoppers. Front-ending loyalty brings a reward to the front in an effort to engage shoppers in additional purchases sooner.
Too often loyalty has been all about total spend over a year whereas above average spend in just one visit can be more valuable to a business.
It’s an approach that can encourage those who do not shop with you to purchase something else right away, to get the value of the cash discount offered.
Regular shoppers can spend the cash discount right away or come back within any time limit you set.
We started trialling this front-ending loyalty strategy in February 2013 in several retail businesses. We did it using the Discount Vouchers facilities in the Tower Systems software.
Building the basket
From the first day we saw shoppers changing behaviour.
One chap came in to purchase a specific item. When he was handed the receipt the voucher was pointed out to him – offering $2.00 off his next purchase. He was not a regular and so spent the $2.00, and more, right away on another item. He received another voucher and purchased a third item. In all, he spent three times as much as the original purchase – all because of the Discount Vouchers he received.
Around 33% of all vouchers redeemed are used the day they are received. This shows customers building the basket – adding to their purchase that day as a result of the voucher. This makes each visit more valuable to us.
Bringing shoppers back
Around 33% of redeemed vouchers are used within seven days of issue and the remaining 33% are redeemed up to four weeks after issue.
Here’s another real story: A month after we started trialling this new approach to loyalty, a customer came in and used a voucher she had picked up a couple of weeks earlier. She was happy to get $5.00 off a $45.00 item she wanted. This resulted in another voucher so she bought another item for $29.95.
This customer said she would be back. Two weeks later she was.
You control the business rules covering how vouchers are issued and redeemed. You control your financial exposure at all times.
Like any good loyalty program, you need good levers with which to drive shopper engagement and to deliver the benefits it needs to justify the investment.
The Discount Vouchers facilities in the Tower software have this.
You control the amount of each sale you are prepared to give away on the voucher.
You control the products the voucher can be used for.
You control how long the voucher is live for. I suggest 28 days but I have some retailers setting this at 90 days.
You control what it’s called
We have shoppers calling their vouchers Bonus Bucks, Cash Off, Thank You Dollars and other names retailers feel are relevant to their businesses.
The software has been developed in a way that gives each retailer complete flexibility as to what they call their program. This localisation opportunity is important as it gives you ownership over your own program.
Helping your business
With big box and national offering their corporate loyalty programs, it’s important for retailers to offer a genuine point of difference. Discount Vouchers offer this.
While their approach is very corporate, your approach can be more flexible and more focused on early rewards. Over the months of trialling we have seen changes shopper behaviour, it gets them spending more with you.
I’m confident this fresh approach to loyalty is a game changer for any garden centre business. The control you have enables you to easily manage the cost and the value you gain from the program.
This really is a new approach to bringing shoppers back sooner and getting them to spend more with you.
So, which loyalty program is right for your business? That choice is up to you.
Tower Systems provides you with options, some of which are unique to us in our various retail channels.
Thanks to our partnerships and interfaces we provide retailers with a depth of flexibility that is extraordinary.
That you have a choice is vitally important. Better still, that you can move between the options is even better.
Where we are at today in terms of loyalty will be different to tomorrow as change is inevitable. Our commitment is to continue to refresh our software to ensure it and those who use it are competitive.