Loyalty program strategies in the retail industry are very important to the success and profitability of an organization. These strategies are implemented to reward customers for their continued purchases and for referrals. The strategies should be designed to provide employees with real-world rewards for their efforts. They should be rewarded, not criticized, for their continued loyalty and participation.
One important strategy is the increase of employee loyalty. An employee who perceives that they are being rewarded when they report to work or return to the store for their purchases is much more likely to engage in those same behaviors again in the future. Rewarding and recognizing employees on a regular basis for their continued involvement reduces employee turnover and improves employee retention. A retail store has a large volume of customers each day. When an employee knows they will be noticed and appreciated for their effort, they are much more likely to engage in that same behavior in the future.
Another strategy is the implementation of incentive programs. An employee that is consistently making a high percentage of sales in a particular merchandise category may qualify for a bonus. The bonus could involve an increase in salary or an actual cash bonus. This bonus could also result in increased sales or a percentage of overall sales credited to the employee’s sales commission.
Customer service is another important strategy. Having an attentive, courteous and helpful staff in the retail industry can significantly improve customer satisfaction. This includes returning customers and helping them to feel welcomed and comfortable while purchasing. This in turn, leads to increased sales as satisfied customers are much more likely to purchase items from the same company. It is also important to establish customer loyalty by offering various discounts or rewards for customers who remain a customer for a certain period of time. This strategy encourages repeat business and builds customer loyalty.
A loyalty program often times includes reward programs for products purchased by loyal customers. An example would be a program in which customers who purchase a certain amount of a specific product over a specified period of time would receive a certificate or other form of award. In this way, the more a customer purchases a product from your organization, the greater the chances that they will purchase something else from your company as well. This increases the number of returning customers and extends the life of your existing customers.
Finally, the most popular loyalty program strategy is offering customer service that goes beyond what is traditional. When customers feel like they are appreciated, their level of satisfaction typically rises. For example, if you go above and beyond what is standard in customer service, it will have a positive impact on the satisfaction levels of your customers. In addition, such actions create a more relaxed environment, which is good for overall retail sales as well.
In today’s competitive retail environment, customer service plays a critical role in customer retention. If you do not provide it, then the likelihood of losing a customer to another competitor is very high. There is nothing worse than having a customer walk out of your store frustrated and with a list of other stores that you could have provided service to. It is important to realize the importance of customer service and the benefits that can be derived from implementing a program. If you do not believe that customer service is critical to maintaining customer loyalty, then ask the opinion of a few retail experts before implementing one.
Implementing a retail loyalty program takes some planning and effort. Make sure that you begin by evaluating your current strengths and weaknesses as a business entity and identify the goals that you wish to achieve through such an endeavor. Then look for opportunities to improve upon these areas in order to maximize your chance of success.