Companies big and small are realizing the value of loyalty programs. Whether it's airlines offering frequent flier miles or telecom companies cutting fees, these businesses and many others see loyalty rewards programs as a significant factor in customer retention. According to the C-Store Shopping profile report, 51% of customers buy more frequently from businesses where they’re loyalty members and 22% shop exclusively at C-stores where they’re loyalty members.
Loyalty programs can be tricky
Loyalty programs can create substantial value if done effectively. Some businesses misuse or misunderstand loyalty programs, fueling skepticism about them in some circles. That's because some run these programs as quick promotions that offer short-term giveaways to all customers. While this strategy can provide some value in the short-term, it doesn’t necessarily foster long-term loyalty and retention.
How can a loyalty program help my C-store?
Suppose you run a small C-store at a gas station. In that case, you may be hesitant to create a loyalty program, especially if C-store purchases make up a small percentage of your revenue and profit margins. However, loyalty programs can boost those margins over time if created and executed in a way that fits your business model.
Loyalty programs don’t always provide overnight solutions. However, they can help you understand your customers and develop better relationships with them, which can lead to increased sales down the road. Here’s how loyalty programs can do that:
- It gives you reliable customer data: When customers sign up for a loyalty program, they register their information to become a member. Once they're a member, this can give you better insight on their purchases. Customers prefer a personalized experience when they shop, so understanding their buying patterns can help you market deals and discounts that suit their interests. When you let your customers know you understand them and their needs, you’re more likely to retain their business over time.
- It can boost your reputation: You know you have a good loyalty program if customers do all the promoting for you. If customers find value in your loyalty program, they’ll likely tell their friends, family and others or post about their satisfaction on social media. When the word spreads, you can focus more on giving customers what they want, rather than trying to get them in the door.
- It can increase sales through enticing rewards: Some loyalty programs have a point-based rewards system. The more customers buy from your store, the more discount points they can rack up. Giving customers a goal to achieve can keep them coming back to your store to get more points and eventually obtain more discounts.
- They can help segment profitable customers: You’ll likely encounter two types of customers who buy from your C-store: those who are profitable and those who are unprofitable. Those who are profitable are loyal customers who buy regularly from you. Those who are unprofitable are the ones who only come in when there are discounts or good deals for a temporary period. Loyalty programs can reward and segment customers who regularly give you their business. This can allow you to build better relationships and focus on how you can make their experience better.
Helping you achieve your business goals
Loyalty programs can provide a great return on investment for your business. There’s nothing better than an easy and cost-effective program that provides valuable insights and customer retention. If you haven’t set one up already, a new year and a new business quarter are right around the corner. Tecmark can help by giving you the guidance and digital tools you need to make your loyalty program seamless and user-friendly.