Customer loyalty programs have evolved a lot from the old punch-card systems, thanks mostly to advancements in retail technology. With a wide range of data available now for each loyalty member, retailers are able to optimize their programs to generate more revenue by using analytics from their point of sale (POS) systems to personalize the customer experience and turn more shoppers into loyal customers. In fact, according to RetailMeNot, 51% of U.S. retailers plan to offer loyalty programs to consumers in 2018 to positively affect sales growth.
Customer Experience
One of the best ways you can drive customer loyalty is by offering a 5-star customer experience. By analyzing data from your rewards program, you can look at each customer’s shopping habits and offer them the discounts and rewards that benefit them the most, personalizing their experience and motivating them to continue shopping at your store. Over 57% of customers participate in loyalty programs to save money. When you offer customers discounts and rewards that matter to them, they are more likely to return the favor and continue making purchases at your store.
Referrals
It’s common knowledge that people often talk about what they love. When a customer has a positive interaction at your store, they are already more likely to share it with those they care about so that others can share in the same experience. Retailers can further drive these interactions if customer loyalty programs include rewards for referring friends and family to your business. When you offer additional discounts, points, or freebies for loyal members who bring in new shoppers, you not only promote loyalty from your original customers, but you are more likely to benefit from the new customers who want to enjoy the shopping experience their friends spoke so highly of.
Cross-Selling Opportunities
Back when customers carried punch cards, retailers didn’t have any additional data other than the fact that they made a certain number of purchases. Now, however, data from customer loyalty programs is more readily available than ever via your POS system. You can obtain deeper visibility into what each customer is purchasing, and use that information to determine what related items can satisfy additional needs, cross-selling products based on that information. Cross-selling can make customers aware of products they may have needed or wanted, but did not know you offered.
Reduce Marketing Costs
New customer acquisition is expensive for retailers. But with customer loyalty programs, it’s easy for retailers to grow revenue streams through existing customers—and– this strategy has proven to be much more cost-effective than acquiring new shoppers. When retailers prove that they are motivated to reward their existing customer base, they turn casual shoppers into loyal customers. Loyal customers are the ones driving up to 70% of sales by spending more over a longer period of time. It benefits retailers to spend less on paid advertising to a wide audience, and more on rewarding existing customers, which is made easy with data from your POS system.
Data Analytics
Customer loyalty programs have come a long way, and POS data analytics have given retailers more power to ensure these programs are successful. Retailers can analyze data to see which strategies work best on their loyalty members, and leverage those strategies to generate more revenue than ever.
When taken full advantage of, the data that your POS provides can put you ahead of the competition and build a successful relationship with your customers that keep them coming back time and time again.
