Are Retail Loyalty Schemes Still Rewarding?
Before the widespread use of internet and technology becoming involved in almost everything, a reward scheme or customer loyalty program offered by a store meant a 3.5” x 2” rectangular, plastic card that promised its bearer a ‘free’ item on say the 10th purchase from the said store.
But with the advent of online shopping and smartphones becoming an integral part of our daily life today, loyalty schemes now encompass various other tactics to lure customers to keep coming back.
Due to technology, reward schemes have become more engaging and more relevant than before. And what’s more, instead of waiting and having to visit the store to redeem the benefits like before, reward schemes now inspire real-time action whenever a customer wants.
Digitalization offers new pathways for retailers to expand their businesses by building a strong customer base. This, in turn, is easily achievable via an efficient and effective use of loyalty schemes.
But are retailers really optimizing the benefits it has to offer? Read on to find out.
The golden key to establishing a presence
Loyalty schemes have long been considered as a powerful tool for every retail marketer.
This is because they help increase sales by rewarding loyal customers and also attracting new ones. Such schemes prevent the customers from lapsing by promising them additional benefits if they continue shopping from the store.
It goes without saying that as competition in the industry continues to rise, it’s important to ensure you have a strong and loyal customer base for business survival.
A market research conducted this year, which involved about 50,000 customers from the U.S and U.K., found that over 85% of people are more likely to recommend a brand with a good loyalty program to others in their circle.
Therefore, it proves that making your customers feel special and valued never goes out of style.
Products and service matter
If a restaurant had a horrible service and tasteless food, would you dine in again just because they have a ‘good loyalty program’?
Obviously, you wouldn’t.
Although a good loyalty program can prove to be highly beneficial to your retail store, what’s important for it to be successful is that you provide a good service and quality products.
Once you have that, you should then develop a unique and rewarding loyalty scheme.
For instance, Sephora offers its customers free makeup classes along with various beauty products to keep them engaged and interested in the brand.
Despite the fact that loyalty rewards are more important and beneficial today than they were before, the fact remains that there exists a difference between what the customers want, what is being offered and what is finally redeemed.
For instance, customers normally value discounts programs on products of their own choice or in-store coupons to spend. But retailers usually offer store credits and free items that are not always what the customer really wants to be rewarded with.
Therefore, for loyalty schemes to be truly beneficial for both retailers and customers, it’s necessary that the store owners pay attention to their customers’ preferences and then offer reward schemes that are designed accordingly.