Customer loyalty is a hard-earned and highly valuable characteristic that organizations have long been trying to gain and retain. The birth of loyalty programs have given brands the ability to reward their customers for choosing to do business with that company, and in turn hope that they will keep coming back.An infographic recently launched by Merchant Warehouse notes that almost 70 percent of customers choose where to shop according to their potential to earn loyalty points. Further, highlighting the importance of loyalty programs, 70 percent note that loyalty programs are part of their relationship with a company.
Organizations recognize the importance of loyalty programs, with 82 percent of small business owners saying these are their main way to grow their business.
But according to Chris Wuhrer, Merchant Warehouse's senior vice president for strategic initiatives and product marketing, historically the tools to create and maintain loyalty programs were not easily accessible to smaller businesses. However, mobile technology is making it easier for smaller companies to launch and manage loyalty programs, allowing them to somewhat level the competition playing field.
Yet, Wuhrer notes that small merchants tend to have very limited funds to invest in loyalty programs, making it even more important that they can access easy-to-use systems which will not require a long onboarding process. "You don't need very sophisticated or challenging systems," he says.
Although today's loyalty platforms give retailers the necessary tools to launch successful programs, organizations still need to do some research to determine what they want to invest in. "Retailers need to determine what type of reward they want to give customers for their loyalty," Wuhrer says.
Secondly, organizations need to tap into their available data to make sure they are providing the most relevant offers to individual customers. "We're seeing an evolution towards very specific offers based on purchase history," Wuhrer notes. For example, a coffee shop might target offers to get customers to make more frequent purchases or interest them in new items. "Data is allowing organizations to make more targeted offers which are even specific to the time of day," he continues.
While the main aim of loyalty programs is for organizations to increase traffic to their outlet, Wuhrer notes that some retailers are working together on joint loyalty programs.