Last summer, we surveyed more than 100 small business owners, managers, and 700 shoppers about back-to-school shopping, and the results were clear: Having a loyalty program in place to draw in shoppers is a must. It’s often the difference between consumers buying from you or heading elsewhere for a better deal.
The lessons learned from back-to-school can be applied to other seasons as well, particularly the winter holidays.
The 2013 holiday shopping season brought in $601 billion, making the stretch from Black Friday to Christmas the biggest shopping time of the year.
Though Black Friday refers to the day when many stores go from “in the red” to “in the black,” retailers often still suffer from lackluster or unpredictable sales during this key time of year.
The busiest shopping season is also the most competitive. So, if you’re looking to amp up sales this holiday season, it’s time to dig up your notes from back-to-school and review one of the most important subjects: Customer loyalty.
Even with Black Friday nearly upon us, it’s possible to put a loyalty program in place. Of course, you need to understand that building loyalty isn’t as simple as handing out paper punch cards—it takes a more strategic and data-driven approach.
Here are five loyalty lessons we learned from back-to-school that can and should be part of your holiday sales strategy this year:
1. It’s a Smart Way to Beat the Competition
Sure, shoppers have their go-to stores, but if you think there’s nothing that will change their behavior this season, think again. According to our survey, 91% of shoppers would happily head elsewhere if a retailer offered a promotion or reward, and 53% said price is the biggest determinant of where they choose to swipe their cards.
In the case of the budget-conscious consumer on a mission, the business that has the best loyalty program often makes the sale (and builds long-term trust with the customer).
Now, some retailers may think that they can shrug off loyalty. Though the National Retail Federation projects a 4.1% increase in holiday sales after a less-than-ideal start to 2014, it should also be noted that shoppers often set out with a strict budget in mind and only make purchases where they get the best deal. So while you may have been the most successful retailer online or in the mall last year, that doesn’t mean you’re guaranteed the same results this year.
Instead of resting on your laurels, look at loyalty as an opportunity to not only compete with other stores, but also to bring in new customers and keep old ones, well, loyal.
2. It’s the Gift that Keeps on Giving
While some shoppers inevitably go on a returning spree once the season of gifting comes to a close, the advantages of loyalty programs far outlast that sweater one of your customers can’t wait to exchange.
In our survey, we found that retailers can boost customer acquisition up to 10% and market share up to 20% by implementing a program that rewards customers for their purchases.
And you won’t just see the benefits in-store. Loyalty program members are 40% more likely to open promotional emails and 20% more likely to click through to your site. And they’ll purchase, too: We found that each promotional email sent to a loyalty program member yielded 10% higher sales.
3. Get on Board Early for the Best Results
70% of retailers who took our back-to-school survey said they had no rewards program in 2013. We also asked respondents if they planned on 
running a program the following year, but only 34%—a 4% increase—had a plan in place to make this a reality.
The lesson here: Don’t wait around for your competitors to employ loyalty programs—beat them to the punch. The sooner you take action, the greater advantage you’ll have when shoppers go hunting for the best deals around.
If you’re looking for proof, just ask retailers who have run a loyalty program in the past.
The results are overwhelmingly positive, with 97% planning to repeat their successes the following year. While it may seem scary to implement a new program loyalty program during the busiest shopping season of the year, it can be a very effective tool in your arsenal.
4. To Get Results, Get Social
To get the best results from your loyalty efforts, make sure you deliver offers in the way that customers like to receive them. Interestingly, when we asked shoppers their preferred method of receiving rewards for back-to-school shopping, 49% chose social media. That serves as an important lesson to retailers preparing for the holiday rush.
Offering incentives for follows, likes, and shares can earn you an audience of shoppers who’ve already expressed interest in your brand. Our results show that when you provide an offer to consumers online, they’re more likely to make a purchase on your website or head to your store. Fostering loyalty via social media isn’t just a great way to thank shoppers for following you−it also means they’ll likely stay connected, anticipating future promotions.
5. It Makes Every Shopping Experience More Personal
Consider this: One of your loyalty program members has been eyeing a pair of jeans on your website. When he or she enters your store a few days later to try them on, you offer them a denim-specific coupon and close the sale.
Using data to bridge the gap between online and in-store purchases is an effective way to tailor the shopping experience. Of those we surveyed, 65% of merchants are taking advantage of data-tracking tools, allowing them to tap into valuable learnings about their customers and adjust their offerings accordingly.
Instead of blindly creating promotions and analyzing their effectiveness after the fact, data-driven loyalty programs allow you to better anticipate what will actually make the sale and can even guide your inventory decisions. When you target regular shoppers with exclusive sales and incentives based on their shopping habits, the decision to purchase becomes easier and everyone wins.
While there are many options for structuring your loyalty program, the advantages of having one are clear. Stores that offer rewards to loyal customers are more likely to get new shoppers in the door and to keep them long after that first sale. So, while the most prepared shoppers are making their lists and checking them twice, make sure your loyalty program is up to snuff, or you could miss out.
And remember: Putting a loyalty program in place now will also prove rewarding during the other biggest spending seasons of the year, with Valentine’s Day ($17.3 billion), Easter ($15.9 billion), and Mother’s Day ($19.9 billion) right around the corner.
Jenn Reichenbacher is Senior Director of Corporate and Channel Marketing at payment solutions provider Cayan.