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Increasing Customer Retention through a Loyalty Rewards Program

August 9, 2017     Blog

Implementing a loyalty rewards program is one of the best ways for retailers and restaurant operators to attract and retain customers and to increase sales. In fact, a study by loyalty program analysis provider Loyalogy found that loyalty programs can boost the frequency of customer visits by 35 percent. Loyalty rewards programs, however, must evolve in response to changing consumer preferences. For best results, consider these increasingly popular options:

  • Tiered rewards.  Tiered programs have become a popular alternative to simple “punch card-type” programs. Tiered programs offer premium rewards for customers who spend more money per visit or who visit more often. In a tiered program for example, you might offer customers a $5 discount off a $25 purchase after five purchases and a $10 off a $50 check after seven visits. If a customer needs a little push to join, you can also use “upper-tier” discounts as an incentive.
  • Free items or percent-off deals. Who doesn’t love “freebies”? Now more than ever, loyalty rewards programs that feature a complimentary item or a deep discount on the purchase of an item after a certain number of points are resonating with customers.
  • Gamified rewards.  Gamification has made its way to the loyalty rewards program space. Customers enjoy collecting badges or tokens, comparing their progress against milestones, unlocking parts of a story — and of course, playing an actual game. For many consumers, the idea of earning points for watching promotional videos or referring a friend to a store or restaurant also carries significant appeal.
  • Membership benefits beyond merchandise and discounts. People like to feel special. So not surprisingly, many people  choose to participate in programs that offer special incentives as well as free merchandise or discounts. These incentives can include “members only” events and perks, like product demonstrations and celebrity appearances in stores and “chef’s dinners,” food tastings, and classes in restaurants. You can require that customers make a certain volume of purchases to be eligible for special membership benefits.

How Your Point of Sale (POS) System Can Help
Increase the chance of success with your loyalty rewards program with a Point of Sale (POS) system with a built-in loyalty program. Here are the advantages:

  • Faster data collection and rewards redemption. When a POS system has integrated loyalty, data is automatically collected. This saves time and minimizes errors. Rewards redemption is equally efficient because customers’ point balances can be easily accessed from the POS system.
  • Insights into program effectiveness. Reviewing rewards program data from an integrated loyalty program module offers insight into which incentives were a hit with customers and which were not. You can then make adjustments to focus on what is working best.
  • Better understanding of customer base. With rewards program data at your fingertips, you can also gain a deeper understanding of who your customers are, what they are buying, and what their preferences appear to be. The end result is an enhanced ability to target customers with rewards program initiatives and broader marketing campaigns.

These days, competition for customers’ retail and dining dollar is stronger than ever. Loyalty rewards programs that satisfy ever-changing customer demands and that are properly managed using POS technology, will help you succeed.

Contact us today for new ideas on how to improve your business.