‘It’s easier to love a brand when the brand loves you back’ –  so says marketing guru, Seth Godin, and his pithy summary encapsulates why more and more retailers are focusing on customer appreciation strategies to grow revenue and profits in their business. Showing shoppers how much you value and appreciate them is one of the fastest ways to improve their retail customer experience and gain their loyalty – and loyalty, as retailers know, drives increased revenue and profits.

Why is customer appreciation important?

Customer appreciation is essential because it is the driver of the great, universal retail goal – loyalty. Retailers all want loyal customers – shoppers who have a positive retail customer experience, come back more frequently, spend more at each visit and who can enhance the retailer’s own marketing, by becoming an advocate of the brand and telling others how much they love it. Customers are much more likely to be loyal when they feel appreciated, known and valued, so appreciation is one of the fastest, and most effective ways to build loyalty.

The reason that loyalty is such a big goal in retail is that, quite simply, customer retention is the most cost-effective marketing strategy. Numerous studies have shown that it costs up to five times less to retain a customer than to win a new one. Loyal customers therefore offer a cost-effective way to increase revenue and can drive a bigger boost to profits. In fact, retaining just 5% more customers translates to a 25% increase in profits.

The steps to customer appreciation and loyalty

For retailers, implementing customer appreciation strategies requires:

• Analysis – retailers need to know who their customers are and how they buy. So the first step is to capture and interrogate sales data, to provide insights into who buys what, with what other products, when, where, through which channel and how often? The more a retailer can understand about shoppers’ preferences and buying habits, the better the foundation for customer appreciation strategies.
• Promotion – based on analysis, retailers can build tailored campaigns. Tailored promotions make the customer feel seen and known – a vital component in driving loyalty. In one recent pilot program, personalized marketing programs saw 2-4% higher gross margins, compared to generic offers.
• Tracking – every time a promotion is sent out, it’s essential to understand the impact it has on the business. Knowing what does (and doesn’t) work ensures retailers can refine and enhance their offer.
• Recognition – it’s essential to be able to identify members of your point of sale customer loyalty program, whichever channel they are using. Online, that means recognising and welcoming them as they log in. In store, recognition may be through them presenting their retail customer loyalty programs card at the checkout, or even before they enter the store, with geofencing technology that recognises when they are close to or entering the store and sends them a welcome message.
• Reward – the way to keep loyal customers is with an enhanced retail customer experience and enticing rewards. Not all shoppers want the same rewards, so a range maximises your chances of success.

Point of sale customer loyalty technology

Managing customer appreciation strategies requires smart retail technology. Selecting a POS platform that includes retail data analytics, promotions and point of sale customer loyalty will make designing and implementing customer appreciation strategies more streamlined and efficient.

Data analytics uses POS system customer data to understand consumer behavior and preferences. This feeds into designing and disseminating offers via the promotions engine. The results of those promotions are captured in the point of sale, providing insights into which promotions and offers work best in driving take-up. With the help of the right POS system, customer engagement can be increased significantly.

The point of sale customer loyalty system recognises the customer at the checkout, or via geofencing, as they approach or enter the store. The POS system rewards program ensures customers receive their earned rewards and retail customer loyalty programs apps make it simple for customers to track and redeem their points or other incentives.

The key is that all these parts of the system must be integrated and must work together seamlessly. When retailers use the right POS system, customer appreciation strategies become more streamlined, are more efficient and deliver a better retail customer experience. A point of sale system with integrated functionality for analysis, promotions, retail customer loyalty programs and apps will help retailers to implement their customer appreciation strategies, drive up loyalty and boost their bottom line.

FAQs

What is personalization and why is it important

Personalization means sending offers that are tailored to each shopper. Offers that are meaningful to the individual customer generate a far higher take-up than a ‘one size fits all’. That means offers based on what they buy or would like to buy – sending new parents offers on baby products, for example, or cat owners promotions for a new flavour of cat food. Offers could be time-based – seasonal offers for holidays, or a special discount for a shopper on their birthday.

What are the best ways to reward customers?

There are many ways to reward customers, and the ‘best’ way is the one that the customer likes best and uses. So the wider the range of rewards you can offer, the better the chance of hitting the jackpot. Some of the most popular are tying membership to pricing strategy, with lower pricing for members on key goods; and points systems, where points can be redeemed for goods. But don’t forget that not everyone only wants monetary offers – a very successful technique for some retailers is exclusive events, product demonstrations or early access to new products.

Content Sources:

Seth’s Blog

Forbes

Deloitte

McKinsey