How Can Retailers Deliver Winning Strategies for Their Loyalty Programs?

That is a question that marketers would love to be answered. Well, according to an infographic from DataCandy, the answers are below.

According to the infographic titled, “How Sweet It Is: The Satisfaction of a Successful Loyalty Program,” loyalty drives sales—today, tomorrow and into the future. But many retailers are not keeping their loyalty programs fresh with the sweetest rewards.

U.S. households participate in close to 22 loyalty programs, but less than 10% of loyalty members are actively using their accounts and redeeming offers.

To sweeten the loyalty pot, retailers need to build winning strategies that deliver successful loyalty programs. According to the infographic, those strategies should include the following:

·      Data and Analytics–to define the existing loyal customer base: 37% of retailers believe “retaining customers” will be the No. 1 contributor to revenue growth in the next three years. Customer retention directly correlates to same-store sales.

·      Customer Segmentation–based on purchase patterns and demographics: Use the Recency/Frequency/Monetary formula to create relevant customer segments. 73% of smartphone/tablet users want to interact with loyalty programs using their mobile devices. “Retailers need to develop differentiated rewards. Recognition also tends to be a one size fits all, which hinders program adoption,” said Jonathan Copulsky, Principal, Deloitte.

·      Targeting–defining loyalty program goals for each customer segment: Protect, grow, acquire, and re-activate loyal shoppers; 69% of loyalty program members want to receive personalized discounts on their favorite items. “Cookies, geo-fencing, and other tracking technologies allow retailers to gather data including shopper purchase history, spend, and browsing behavior,” said Esprit Smith, Marketing Consultant, Lenati customer loyalty consultancy.

·      Key Performance Indicators (KPIs) – to determine the success of loyalty initiatives: Track sales and transaction penetration, loyalty program activate rate and redemption percentage; 40% of loyalty program members agree that their loyalty program’s “values” are “the same as mine.”

A successful loyalty strategy–designed to attract the right customers: Well-planned loyalty implementation is critical: The first four to six months of a loyalty program launch are critical! Nearly 30% of retailers rank “Waning store/brand loyalty” as a top five technology-related challenge

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