CUSTOMER LOYALTY PROGRAMS
Easy to Manage and an Effective Retention Strategy
Incentivizing shoppers through loyalty programs is a marketing tactic used by 57 percent of independent gift store owners. They use a variety of methods to administer the programs, the most popular being punch cards and systems, including POS, which track points automatically.
POINT COLLECTION
Most customer loyalty programs are dependent on how much a customer spends. For example, every $1 spent equates to one point. Once the customer spends a certain amount (let’s say $200) or reaches a certain point level (200), they can redeem points for a discount ($10 off, $20 off, etc.) or a percentage off.
RESTRICTIONS
Retailers often limit points programs to full-priced merchandise (customers can’t
collect points on sale merchandise) while others require a number of points be collected over a time period. For example, if a customer spends $200 in three
months, they will receive $20 in “loyalty dollars”. Another common approach is to confine the program to a product type. For instance, a New Hampshire retailer offers her customers a jewelry club card similar to a coffee card. “For every $25 they spend on jewelry, we mark off the card with a heart,” she explains. “When the card is full, it’s worth $25 off their next jewelry purchase.”
ENROLLMENT
Many retailers report that enrolment into their customer loyalty programs is quite simple. “We just ask every customer that comes in the store if they want to join,” says a retailer from Ohio while an Oklahoma store owner says, “We ask customers to join our loyalty program at the cash register, and the majority of them sign up.”
Rather than asking the customer directly, an Ohio retailer advertises her loyalty program at the cash counter. “I have a small clipboard on the counter with an index card on it. Everyone is invited to join our rewards club. They fill out the
card and we file it away with the others.”
OPPOSING VIEW
After six years, a Rhode Island store owner determined the punch card loyalty program he was offering customers took too much time to execute. “We’d have lines of people at the checkout counter and a customer wouldn’t be able to locate their card,” he says. “We found the program became a negative, and that it’s best to have great merchandise and offer value for the dollar.”
PROGRAMS USED
Store owners who don’t use a punch card or index card system use a range of software to administer their programs, including POS systems which include a loyalty program:
Marsello (marsello.com)
Quickbooks (quickbooks.intuit.com)
Thirdshelf (thirdshelf.com)
Fivestars (fivestars.com).
