Is your store loyalty program old, tired and under-performing?

With the sheer volume of customer rewards programs on offer, shoppers have become dazed, confused and disinterested in complex, points-based loyalty programs. Many are starting to see through the “cons” and calculate how little value they generate. In fact, the cost of some membership programs aimed at cultivating loyalty, often outweigh the rewards.

shopper loyalty programsWhile things have certainly changed from the 18th century copper tokens and the later version of stamps used as delayed discount programs, the goal remains the same: to increase business, improve sales, strengthen the relationship between the customer and the retailer, and ensure the customer keeps coming back on a regular basis.

However, it is vital that a loyalty program is of benefit to the customer in order to succeed. If rewards are unattractive or uninteresting, it’s likely the program will be a failure. Rather than rewarding shoppers, many programs end up convincing them to buy other high-margin products or useless, unsold inventory.

On the other hand, if the benefits are attractive to each individual shopper, loyalty programs can increase sales and encourage customers to return for their next purchase.

This brings us to the question – is using price to build customer loyalty a good idea? Especially today, with the widespread growth of AI and automated shopper platforms able to deliver personally tailored offers and rewards straight to shoppers’ digital wallets. Using price to build loyalty is in fact a contradiction in terms. What these programs are really doing is teaching shoppers to be disloyal and to shop around for the lowest prices.

It’s time to move away from this old system towards a more innovative and individually tailored program. If any of the points below ring true, it’s likely that your loyalty program is outdated and underperforming:

No data analysis

Retailers need a platform that will enable them to design tailored and individualistic service to their loyal customers while building brand loyalty. This can be done by tracking the purchase history, analysing the data of each customer, and marketing offers directly to their shopping behaviour.

Meaningless rewards

Most of the rewards that consumer goods retailers offer are insignificant, due to thin margins and an extremely competitive market. Shoppers have noticed this and are starting to realise that the benefits to these loyalty programs are lacking. Retailers need to find a way to offer more significant and innovative benefits instead of bribing them with more and more discounts.

No true customer loyalty

Without a platform that can turn customer data into information that is usable in terms of tailoring deals and rewards to loyal customers, a loyalty program can soon become a waste of money – another expensive marketing gimmick that is not actually cultivating any loyalty. Retailers need to find ways ensure their program stands out from the masses and that members feel part of an elite group who consistently choose their brand over other similar brands.

Lack of communication

A successful loyalty program should enable easier communication between retailer and customer, in order to build a mutually beneficial relationship. There needs to be a shift from generalized price discounting to guided shopping and individualized benefits where shoppers feel acknowledged and valued, and are sent only offers that are relevant and meaningful to their individual behaviour.

To create a habitual purchasing customer, creating the motivation alone isn’t enough. Most psychologists agree that to create a habit, you need just three things: a cue (time, place or mood to trigger customer behaviour), reward and repetition. However, with ShopperLogiQ, we go beyond this with customized and individualized motivation and rewards to ensure that your customer’s shopping experience is more than just a thoughtless habit.

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