As if you don’t already have enough to think about, retailers these days face an onslaught of important tech-centric decisions: To switch to a progressive point of sale, or to make do with a more basic system? To open a web store, or not?
Retailers can also invest in all sorts of tech solutions to automate processes, such as staff scheduling, appointment booking, and customer marketing solutions. For those who have come across the possibility of implementing a digital loyalty program, a host of unanswered questions can arise.
You might already know all of the benefits of loyalty solutions, but if you’re like many brick and mortar retailers, you still haven’t made the plunge and implemented one. In case you’re on the fence about this investment, here are five things you (perhaps) never knew about loyalty solutions:
1. They’re pretty much essential for modern day retailers
We’re living in an age where people can buy their favorite brand of shirt online, and have it delivered to their home that day. Superior service and sensorial shopping experiences, however, are just two of many variables that account for the maintained success of brick-and-mortar boutiques – 90% of all retail purchases are still made in physical stores. But competition is fierce, and if independent retailers don’t focus on building loyal relationships with their customers, their margins will continue to shrink.
Loyalty, then, is a key part of remaining successful. A new study reveals that retailers earn 12-18% higher revenues with a loyalty program, compared to retailers who don’t have one. Long story short, if you want to stay ahead, you’ll need to boost revenue, and a loyalty program can help you do that.
2. They keep data safe and secure
Consumers are increasingly wary about who owns their information. Some loyalty solutions are “network” loyalty programs, whereby all of your customer’s information is handled by a third party network. Your shoppers will know they’re divulging their data to a company other than yours because that company’s branding will appear when they sign up to join the program, and when they receive messages. If you choose a solution like this, be sure to inquire about data security.
Another, more secure kind of loyalty solution is the dedicated loyalty solution. With this kind of system, customer information remains in your hands only. Shoppers sign up to the program by giving you (or your website) their information, and only receive messages from your brand. This is very reassuring for consumers.
3. They’re not as complex as you think
Sure, you can configure a loyalty solution any way you want. You can create a unique program based on a cash back rewards program, a points system, a discount program, or any combination or permutation of these. But you don’t have to. Your loyalty program can consist of a simple discount for signing up, and a birthday promotion. You can use it to text your customers about upcoming sales. You can incentivize people to keep shopping with you any way you want, and it doesn’t have to be complicated.
4. They tell you if they’re worth the money you spent
With most reputable loyalty solutions, it’s easy to see your return on investment each month. Easy-to-read reports show you how much the system cost that month versus how much revenue was generated as a direct result of using it (sending promotional emails and SMS, as well as incentivizing customers to sign up to redeem points or rewards). Unlike other marketing activities, you’ll know if your loyalty-boosting activities are fruitful or not.
5. They’re affordable
New loyalty solutions are cost efficient for retailers that are just starting out. Monthly, pay-as-you-go subscriptions eliminate large, upfront software and development costs. Of course, all investments require careful consideration, but realize this: it costs at least four times more to sell to a new customer than it does to an existing one. Ask yourself how many transactions (with existing clientele) would add up to the monthly fee of your loyalty program – probably not too many!
You already spend money each month on acquiring new customers, why not invest in retaining them? If you run an independent retail business, devoted customers are your most valuable asset. To answer more of your questions about loyalty solutions that could be right for your business, check out Thirdshelf.
We’re excited to announce we will soon launch Springboard Retail Loyalty which is powered by our friends at Thirdshelf. Springboard knows retail and Thirdshelf knows loyalty; the combination is powerful. We’re pleased to present this guest blog from Thirdshelf.