A huge collection of 3400+ free website templates, WP themes and more http://jartheme.com/ at the biggest community-driven free web design site.

Power of a Loyalty Program Can Increase Fivefold with Store-to-Store Networking

Imagine a nearby plaza or town centre that you frequent for restaurant, supermarket, spa & salon and other necessary or recreational activities. Invariably most of these businesses will have exciting offers or deals to entice you. However if you avail their offers you will only be able to buy specific products or services attached to the offer. Instead wouldn’t you love to have the freedom to buy anything you want but at an affordable price? Yes, off course and the way to make it happen is through a networked customer loyalty program.

A networked loyalty program consists of multiple stores across different industry verticals participating in a common loyalty program. Members of the loyalty program, in other words customers, can earn and redeem reward points at any of these networked stores.

Studies have shown that the benefit or power of a loyalty program can increase fivefold with store-to-store networking and there are three strong reasons for it:

A networked loyalty program captivates the customer and creates stickiness effect:
When a customer realizes that he/she can earn points on every bill and redeem those points at a later point of time in the same store or at any other store in the network, he/she is more likely to get hooked on to the program resulting in increased patronage.

Customers can use cash reward to purchase items of their choice:
When a customer has cashback points available to redeem, he/she is more likely to purchase an item that he/she always wanted to buy but could not because of the high price. This increases the spread of items purchased which is what the merchant wants.

Merchants get repeat footfalls, bigger orders and can maintain higher margins:
Loyalty points encourage customers to look beyond offers and discounts. Hence they end up spending more resulting in higher margins and profitability for the business.

Hitherto it was assumed to be very difficult to convince different merchants to work together on a single networked loyalty program. However a carefully planned networked loyalty program like r-Rewards that establishes a cap on out-of-store redemption can not only be effective but also very profitable for all participating merchants in the long run. So it is a win-win for both customers and merchants.

3 Reasons Why Loyalty Program Scores Over Discounting

We live in an age of deep discounting where there is no dearth of offers from merchants. While some merchants can afford to give discounts and still maintain a margin, others are doing it so they do not lose out to competition. It is already known that discounting helps in acquiring new customers but it does not guarantee repeat business. On the other hand a customer loyalty program has been proven to be effective in retaining customers. There are three reasons why merchants should offer a loyalty program to their customers vis-a-vis discounting:

1. Customers need a strong reason to come back: A loyalty program rewards customers either in the form of cashback points which can be redeemed during a subsequent visit or a reward in kind for a certain number of visits. Either way it encourages the customer to come back so he/she can eventually earn the reward in cash or kind.

2. Loyal customers are less likely to defect: A loyalty program encourages patronage and creates a soft spot for the merchant in customer’s mind. As a result a loyal customer does not get easily swayed by competing offers.

3. Loyalty program generates more repeat business and profitability: A loyalty program ensures that the same customer visits multiple times resulting in higher net revenue per customer. It is also known that the average order value of a repeat customer is higher which results in higher margins and higher profitability for the merchant.

To conclude a merchant needs both new customers and repeat customers in order to grow and be profitable. While discounts need to be given in order to attract new customers, the focus of the business should tilt more towards retention and profitability. Hence a carefully planned customer loyalty program scores over discounting.

5 Common Mistakes of an App based Customer Loyalty Program

Mobile app based loyalty programs have gained significant acceptance in recent years, especially among the younger generation. However, businesses are still finding it difficult to keep customers engaged with a loyalty app. There are five possible reasons why a loyalty app based program is not working in the long run:

  1. App is difficult to use: If a customer is not able to figure out how to use the app within 5 mins of downloading it, you have lost him/her instantly. Accumulation & Redemption of points should be made very easy and should happen in just one or two clicks.
  1. Points are based on frequency of visits and not on actual spend: Customers get bored with loyalty programs that give points or rewards based on frequency of visits even though it is very easy to understand. Consumer psychology is that if you spend more you should get more in return and hence a loyalty program based on actual spend will find more traction in the long run.
  1. Loyalty program is dependent on staff: An app based loyalty program will fail if it seeks inputs from staff for data entry. Instead it should be fully user driven with minimal staff intervention required only for processing accumulation or redemption of points.
  1. Not marketed effectively: Merely offering a loyalty program to customers is not enough. A loyalty program and its benefits need to be effectively communicated on an ongoing basis via various marketing channels like email, sms, posters, billboards etc.
  1. Too many loyalty apps: If a business owner signs up with multiple loyalty vendors, it just ends up confusing the customer. Instead they should opt for a single loyalty program that is based on actual spend.

r-Rewards is a multistore loyalty program that is delivered over both mobile and web. It has been developed with a vision to bring all local SMBs like restaurants, retails stores, pharmacies, spa & salons etc. on one common loyalty platform. The app is very easy to use, points are based on actual spend and it is fully user driven i.e., no need to walk up to the billing counter. The app can be downloaded from Appstore or Playstore.