Why I’m Still in Love With Loyalty

I have mentioned before that I love a good loyalty program and I’m an active member of a few. As I fly a lot I’m in both the Qantas and Virgin programs and love being able to redeem a free flight even though it has cost me over $10,000 for that seat!! I love the free coffee after six, the free one just seems to taste better!! It seems as though I’m not the only one who likes a good rewards program.

Some recent research from Nielsen’s, which was featured in Inside Retail recently has revealed that 57% of Australian shoppers will spend more with retailers who offer a loyalty program. Furthermore, in a global loyalty sentiment survey, 60% of Australian customers are more likely to return if they have a program in place and a further 48% claimed they would spend more if they were rewarded.

This is good news for retailers, who now days have to fight tooth and nail to ensure they get their customers to come back. Competition is tough and will get even tougher so anything that entices a customer to spend more and come back more often has to be good for business.

The research highlighted a couple of things that retailers need to ensure their loyalty program is up to date with today’s savvy shoppers.

  • Flexibility is very important as today’s shoppers are buying in-store as well as online, on mobile, tablet etc so the loyalty program has to embrace all of these platforms.
  • Tailoring loyalty benefits for specific customers is also critical. This includes targeted specific offers that apply to individual customers and this could be in store, via text or email. If the offer is too generic or difficult to access you will lose that customer quickly.

What I believe is still not done very well is the in-store promotion of a companies’ loyalty program. Too many times I have witnessed firsthand not being asked if I was a member of their loyalty program. Or if I am asked (and I’m not a member) the follow-up, if there is one is pretty much the bland question “Would you like to join?” The response from most customers is a quick “no” and that’s it.

So here’s my recommendations on how to increase the number of loyalty members and the number of times existing members will scan their cards.

  • Run a quick training session on the benefits to your customers of being a member of your loyalty program. Get each team member to write down at least two benefits.
  • Remind your team that the first step is to ask the customer if they have their card with them and if not, let the customer know the benefits of being a member – not “would you like to join”!!!!
  • Make sure they know how it works, sign up, cost etc so they can answer customer’s questions.
  • Set some goals for the following week – a number of sign ups and swipe rates so the team has a goal to go for – if you can do this individually, it’s even more powerful.
  • Always lead by example as your team will be watching to see if you do what you say.
  • Follow up by observing the team in action. If they are following the steps in point 2), provide the team member with positive feedback. If they are not, identify what they are not doing and ask them how they could improve. Follow up again to catch them doing it right.

Six simple steps that will help increase the number of loyal customers that will spend more and come back more often. Well worth the small amount of time to get this happening!!

Roger Simpson – CEO, The Retail Solution and Author of “The Retail Solution” With over 35 years’ industry experience, Roger Simpson is recognized as Australia’s #1 Authority on customer ROI in the retail industry and as a global expert on staff coaching, customer service, and selling skills.