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Retail customer trends point to the importance of loyalty programs

From club memberships to mobile apps, merchants encourage customers to return by offering them incentives like discounts or gifts in exchange for their loyalty. But are these retail marketing strategies really worth the investment?

According to the RJMetrics 2014 Ecommerce Benchmark Report, repeat customers are one of the best assets a company can have. The study found that the top 1 percent of a retailer's shoppers provide more business than the bottom 50 percent combined, Practical eCommerce reported. Therefore, it's well worth the time and effort to foster lasting relationships with customers.

Loyal customers spend more often and buy more each time
The RJMetrics report corroborated findings by an Adobe study from last year indicating that return customers spend greater amounts on each purchase, the source said. Repeat shoppers also tend to require less customer service, reducing human resource costs.

Therefore, while retail marketing campaigns often focus on converting shoppers, it's essential for merchants to maintain good relationships with existing customers. This is a consideration for email marketing and other ad campaigns, where loyalty can be won or lost depending on whether emails are helpful or seem like spam. 

Loyalty programs
Offering customers incentives to return is an excellent strategy for building loyalty. These programs are most effective when they make use of technological options and focus on relationships, not just numbers. For example, retail customer intelligence makes it possible to offer shoppers personalized rewards based on their shopping activity. 

At the National Retail Federation (NRF) Convention, held January 12-15 in New York City, industry leaders discussed some of the ways they are using mobile to transform their loyalty programs. Representatives from Century 21 explained how they created a mobile app to optimize their four-year-old loyalty program, the convention newsletter said. The app makes the loyalty program more exciting and interactive by giving customers the opportunity to spin a prize wheel and it informs loyal shoppers when there's a flash sale, the source explained.

Loyalty programs are strongest when they foster a relationship between consumers and retailers. At the NRF Convention, representatives from Sephora emphasized the importance of having employees involved in promoting loyalty programs, particularly when they're excited about engaging apps, the newsletter said. Merchants can include loyalty apps in their POS retail management software to make it easier for employees to add customers to their program.




130

Countries

9000

Customers

54000

Stores

159000

Points of Sale

130

Countries

9000

Customers

54000

Stores

159000

Points of Sale

130

Countries

9000

Customers

54000

Stores

159000

Points of Sale