Help Loyalty Program Members Progress

Remember that a major objective of a shopper loyalty program is for you to maintain up-to-date information about your customers, including what they purchase and how to contact them with marketing materials. That can become harder to do when your customers are paying more attention to price than to other elements in the value equation, such as helpful sales staff or customer-friendly return policies. Those loyalty program participants start shopping at another store, and you get out of touch with them.
     And even if you're the price leader overall, another store might be offering a highly discounted special on selected items, so the shopper who is feeling short on cash will go there for those items. For these customers, the loyalty program loses momentum, since they don't see themselves progressing towards the payoff.
     Research findings from University of Southern California and University of Pennsylvania provide a tactic for addressing the problem: Maintain customers' interest in their loyalty program participation by giving them credits for coming to your store, even when they don't make a purchase. In fact, this method is also effective in convincing new shoppers to sign up for the loyalty program.
     There are two key points to making it work, though:

• What you want to produce is a feeling of regular progress towards the loyalty program reward while building the habit in the shopper of keeping your store in mind. Therefore, you might offer a bonus stamp or credit once each week for the shopper just coming into your store.
• Customers tend to assess their progress in terms of percentage of completion more than in terms of the dollar value of the bonus or number of bonus points. Therefore, build the momentum by keeping participants aware of how close they are to the next reward benchmark.

For your profitability: Sell Well: What Really Moves Your Shoppers