Retailers often develop similar loyalty programs to boost their sales and profits. However, most of the programs failed to fulfill the basic and core objectives. Perhaps, the biggest obstacle is the conventional wisdom implemented by the retailers.
Loyalty Programs all about the customer
Few retailers emphasized on customer insights. Thus, the program failed to attract prospects and retain the existing customers’ loyalty.
What are the flaws then?
For retailers out there, here are few flaws that limit their creative thinking process. To create a successful program, take note on these few myths.
Myth 1: Loyalty program can retain customers’ loyalty
Firstly, if you have the very same opinion thinking that loyalty program can retain customers’ loyalty, then you are totally wrong. Most of these programs focused more on design, administration, infrastructure as well as benefits of the program.
These elements are less important compared to understanding customers’ behaviour and attitudes. Since most of the retailers focused on infrastructure, administration, and design, they ended coming up with similar loyalty programs.
To retain customers’ loyalty and attain prospects, retailers need to understand the underlying factor that makes the customers go to the competitors. By understanding the unique experience offered by your competitors, you can now create a program that fits in. When developing a brand new loyalty program, think from customers’ point of view. Predict customers’ behaviour and offer something extraordinary.
Myth 2: Price is the least important lever
In fact, price is the strongest mover that can generate business for your company. Take Wal-Mart for example. Even without a loyalty program, Wal-Mart managed to beat its competitors based on one factor: PRICE.
Price plays an important factor when it comes to retaining the current and existing customers. It is the underlying factor that can move customers from low-margin to high-margin purchases.
Myth 3: Loyalty programs are self-contained initiatives
It is extremely important to balance high-value and high-potential customers as it can affect the loyalty of non-members. Therefore, retailers need to balance the programs’ cost and effort. Another effective strategy is to design and personalized the stores to attract prospects to the new products and latest offers.
Myth 4: Technology is the most effective tool to refine loyalty program
The above statement is inaccurate. Yes, undeniably, technology is one of the most practical tools to market your brand and product. However, the success of the marketing campaign depends on how smart and brilliant your company utilized the modern tools. Tools can be used and considered in the following:
- When deciding the right medium to market your brand, companies need to segment the customers according to their behaviours and attitudes.
- Retailers need to personalize the multi-channel used to attract prospects attention.
- Retailers can use advanced analytics to predict customers’ future purchases. Besides that, advanced analytics help the retailers to optimize the store space for customers’ activity.
- Bear in mind that by implementing advanced analytics, retailers can gather data to create a better campaign for patterns in consumers’ purchasing frequency and behaviour.
Remembers that loyalty programs require company wide effort. Hence, companies need to brief all its staffs before implementing a loyalty program to have their buy-in and alignment.