Attracting customers is often fairly easy for most retailers, but encouraging them to remain loyal and purchase again and again is more of a challenge. Retailers must learn how to retain new shoppers as approximately 65% of a company’s business comes from existing customers. One way to encourage customer retention is by developing a loyalty program.  

Fifty-eight percent of shoppers visit stores where they are members of a loyalty program at least once a month—and 69% say their choice of retailer is influenced by loyalty programs. Retailers can’t afford to ignore the significance. Implementing a loyalty program involves some basic strategic decisions, but the best retail loyalty programs share several key attributes. 

Things to Consider When Designing a Retail Loyalty Program

If you want to build a successful retail loyalty program, you’ll first need to consider the following:

• What actions do you want customers to take? Program users should be rewarded for demonstrating their loyalty to your brand. Most of the time, retailers reward shoppers for making a purchase in order to encourage them to buy again. However, there are other ways to reward program users that could lead them to make a purchase. These may include creating a wedding or baby registry, referring friends and family, sharing social media posts, taking a survey, or leaving a review. In Shopkick‘s case, shoppers can earn rewards for simply visiting the store and interacting with products at-shelf.  
• What rewards will you offer?  Some loyalty programs offer members money off future purchases or store credit, while lower-level rewards may include free shipping, a free offer with purchase, or discounts with selected network partners. 
• How will users redeem rewards? It should be easy for users to understand, earn, and redeem rewards. Coupons or limited-time gift cards can become lost or complicate your program. Most users like having the option to automate their reward redemption, so they don’t have to think about it. Sending reminders about accrued reward points can be a strong incentive to get shoppers to spend more.    
• Will there be any limitations to the reward program? Without complicating matters, you may consider implementing a few reasonable limitations: making rewards available to registered users only, stating that tax and shipping still applies, holding the right to cancel the account at any time, ascribing no cash value to the points, and making points non-transferable. 

There is much to consider when implementing your own retail loyalty program but partnering with a well-known third-party program can help.  

Exploring Attributes of the Best Retail Loyalty Programs

The best retail loyalty programs have these attributes in common:

1. They move people through the sales funnel. Capture top-of-the-funnel shoppers when they first sign up for emails by attracting them with an easy-to-attain reward that illustrates the potential value of the rewards program. Appeal to the dedicated customer at the bottom of the funnel with rich rewards that compound over time. Newcomers to your brand may like the idea of birthday perks or an immediate 10% off coupon, but big spenders who shop regularly might be more enticed by exclusive social platforms, “members-only” sale events, and free shipping offers. The “deal hunter” may be a completely different type of consumer, with a different set of behaviors than the “service-oriented shopper,” but they are both valuable customers to have.  
2. They send out regular communications. Most loyalty program members will want to hear from you. Given the number of brands and loyalty programs competing for your shoppers’ attention, staying at the forefront of the pack is crucial. You can do this with regularly scheduled correspondence—email, social media messages, direct mail, or text. In your eCommerce store, be sure to remind shoppers how many reward points they can earn by adding the item to their cart and checking out. Send out reminders to customers who are close to achieving a reward. Ideally, these communications will be personalized and carry across channels from the virtual world to the in-store experience.
3. They make the system easy to understand. Many loyalty program users like the old-fashioned “Buy 10, Get One Free” punch cards because the path and reward are crystal clear. One way to launch a loyalty program is to use a platform that shoppers are already familiar with—like Shopkick. Users know how to check in to find which brands and retailers are offering deals; how to gain points by scanning products, watching promotional videos, and making select purchases; and they know what they’re working toward—a gift card. By partnering with Shopkick, a group of convenience stores found that 73% of shoppers indicated future purchase intent as a direct result of Shopkick loyalty program participation.

The Best Retail Loyalty Programs Retain Customers

The key to customer retention is finding the right space to engage customers. A mobile app that rewards shoppers every time they make a purchase or interact with a brand offers the perfect opportunity.

Make an impression on new customers and deepen relationships with existing ones using Shopkick.

Make an impression on new customers and deepen relationships with existing ones using Shopkick. By rewarding your customers through a retail loyalty program, you can build positive brand affinity and create a memorable experience, which encourages repeat purchases. 

At Shopkick, our partners find such success when leveraging our innovative mobile shopping app to retain customers. Contact us to start using Shopkick to have one of the best retail loyalty programs in the industry. 

Image courtesy of Stokkete