Progressive Grocer: There are so many loyalty programs out there — and the number just keeps growing. Why is a loyalty program an integral component of an overall marketing plan for small independent grocers and large national chains alike?
Christopher Sandstrom: Listen, data tells the story. I think it’s something like 75% of consumers say they’re more likely to purchase from a retailer that recognizes them by name or recommends options based on past purchases, or knows their purchase history,1 and somewhere around 64% are willing to share personal information with retailers in exchange for personalized offers and discounts.2 Grocers who make the effort to get to know their customer by collecting first-party data and shape their loyalty program around those metrics to personalize the shopping experience will win. It’s that simple. That’s how grocers will have the competitive edge, at least where customer retention, CLV (customer lifetime value), and profits are concerned.
PG: How can stores that have a loyalty program maximize its impact on traffic and sales?
CS: I don’t want to sound like a broken record here, but it’s data. Collect as much of it as you possibly can. It’s super simple too — customers want to be heard, and you can provide the megaphone if you want. Ask them to fill out a form and offer an incentive, maybe a discount on their next purchase or free delivery on their first order. You can also kill two birds with one stone by integrating your loyalty program with your POS to collect customers’ purchase history automatically. So, not only are you collecting that juicy purchase history for every customer, but also payment methods and location. All of this can be used to create personalized offers.
It doesn’t stop there either. You can send surveys to loyalty members asking about their shopping experience, product preferences, interests, the list goes on. All of this is ammunition for creating targeted marketing campaigns and personalized offers.
All of this plays into the customer experience as a whole — you want the customer’s purchases to feel almost effortless. You can even train sales associates to ask customers’ names and offer customized recommendations based on their past purchases.
PG: What challenges can grocers expect when implementing a loyalty program?
CS: We often see that grocers think that loyalty programs are plug-and-play, that any old system will work for them. The truth is that you need a loyalty partner that understands how the platform affects the customer experience as a whole, and how an omnichannel approach can really revolutionize results. The modern shopper expects a seamless experience everywhere they shop. Any hiccup or stoppage on a channel can have devastating results. Omnichannel loyalty programs see a 15% increase in customer retention3 and a 10% increase in customer spend per visit.4 Achieving these kind of results is all about building a consistent experience online, through mobile apps, and in-store. You want to make it as easy as humanely possible to earn and redeem rewards, no matter which channel they choose to shop on.