Give Loyalty Program Members Prestige

Customer loyalty programs—-sometimes called frequent shopper programs—-reward customers for their continuing business. When well-designed, loyalty programs motivate those customers to keep coming back soon and often in order to obtain the rewards.
     Overall, the reward most popular with customers is a percentage discount on future purchases of items selected by the customer. Other popular rewards include discounts on items selected by the retailer and a free gift with a purchase.
     Customer loyalty programs add to your profitability by increasing sales and by helping you target your sales promotions. At the time of enrollment, you can gather information like the person's address, family size, and self-expressed objectives in shopping with you. Then you can track each participant's shopping frequency and what items are purchased. The low costs of database management make it realistic for almost any retailer to collect and analyze the information. But prospective enrollees do want to be convinced their privacy will be protected.
     One selling point for shoppers which is often overlooked by retailers is the sense of prestige participation gives. According to frequent shopper program researchers at University of Pennsylvania and USC, people like to be recognized for store loyalty.
     To get the most from frequent shopper programs, be able to answer "Yes" to these questions:

• Do the enrollment materials, the enrollment procedures, and the participant card all clearly refer to the customer as a "member"?
• Do you have multistep programs, in which a member can move from green to gold status, for example, by increasing the total amount and/or the frequency of purchases?
• When the customer shows the card to the cashier at the time of checkout, does the cashier give extra acknowledgement, such as by looking at the customer, smiling, and saying, "Thanks for being a green step member"?