An Overview of Retail Customer Loyalty Programs The 7 Key Areas Leading Retailers Need to Focus on

An Overview of Retail Customer Loyalty Programs The 7 Key Areas Leading Retailers Need to Focus on

“In coming months, survival in retail will be directly related to the ability to understand, precisely, the shopper's state of mind, deliver solutions that serve their interests and effectively execute shopper marketing programs.” – Millerzell Research

Reward programs are intended to exactly deliver this – be able to track and reward customer behavior. Statistics also indicate that consumer participation in rewards programs is on the rise across all demographic segments.

With more customers choosing to do coupon and bargain shopping in the store, the reward programs that provide personalized rewards will prove to be differentiators if implemented with a laser sharp focus on targeted customer segments.

Below, we explore some of the key aspects successful loyalty programs. Based on our experience of having delivered innovative customer engagement solutions for our retail clients, and on available industry research, the article is intended to be a comprehensive source of actionable Best-Practices that can help retailers take their customer loyalty program to the next level.

1. Segment Based Personalization

The key to winning the loyalty game is to be able to rightly segment customers, and make offers based on the segments' profiles. Retailers are doing this in multiple ways – enrolling customers in different tiers with customers getting to sign-up on less premium tiers and retailers having control on upgrading to the high premium tiers (with better benefits). The segmentation is typically based on current/perceived ROI and/or the customer's propensity.

Retailers leverage these segments and/or tiers to design customer-specific promotional marketing suite that delivers personalized offers. Customers receive promotional offers based on past visit patterns, consumption behavior and other customized offers.

2. “Value” Driven

Today's loyalty programs cannot afford to remain a 'discount card' and need to extend beyond plain rewards. Retailers are moving from points and discounts to personalized services, transferring rewards to charity programs, green initiatives, after-hours shopping, access to product manuals, recipes, articles, “how to” guides and newsletters.

Similarly, customers are rewarded for their “contribution to community” , “long term loyalty” etc. E.g,: Tesco's Clubcard loyalty program members are rewarded for making 'green' lifestyle changes - earning points for reusing plastic grocery shopping bags or by recycling used inkjet cartridges.

3. Allow Customers to “Personalize” Rewards

Customers want to be able to accumulate and redeem reward points the way they want. The common trend that is emerging is to allow the customers to load discounts/offers that they consider of value to them, load them at their own convenience to the card and use them while shopping.

Certain retailers create “clubs” that reflect customers' interest in specific categories and allow the customers to derive tangible and intangible benefits by being members of these clubs. Some examples of clubs promoted by retailers are “Baby Clubs” , ”Home Décor Clubs” , “Organic Foods Club” etc . This is another way for the customers to tell retailers about their unique interest in certain categories.

Download

Download full seminar papers At
http://www.enjineer.com/forum