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Use Your Loyalty Program to Drive Sales and Traffic

Take Care of Your Members

Posted Sep 4, 2018
Loyalty programs and cards can drive customer traffic and increase sales

Repeat customers are one of the most valuable assets a merchant can have. In fact, a study by Bain & Company revealed that repeat customers spend roughly 67 percent more than a first-time customer. So it makes sense that businesses would want to encourage customers to come back again and again.

One way to do that is with a loyalty program. But these programs need to be well thought out and tended to. Without care and consideration, your loyalty program could become one of the 77 percent of loyalty programs that fail in the first two years.

Setting a program out there and expecting it to just work is, at best, naïve and at worst, catastrophic for your loyalty program. Through the use of promotions that complement your loyalty program, however, you can ensure the success of the program while also driving sales and traffic for your business.

Advanced Notice and Special Offers

A loyalty program gives customers the feeling that they belong to a special club – one where they get something that others don’t just through their membership.

Encourage that feeling by offering special “members only” sales and promotions. For instance, if you’re having a clearance sale, offer loyalty members an extra 15% off reduced prices.

You can also offer advanced access to events to drive traffic to your business. If you’re having a Labor Day sale, consider giving loyalty members access to the sale a day before the general public. Do you have a big promotion planned for Black Friday? Offer members of the program a chance to shop early, starting Thursday night or an hour before store opening on Friday.

Incentivize the Slow Times

Merchants always have busy times of the week, and corresponding drops in traffic at other times. Perhaps Tuesday night is your store’s sales slump. Or lunch on Wednesday. These are ideal times to incentivize loyalty members to visit.

Take a page out of Starbuck’s playbook, for instance. Mid-afternoon might not be the time you’re thinking of coffee, but Starbucks encourages repeat visits with a promotion that offers things like free size upgrades after 3 pm. Happy hour is another way that the coffee giant encourages foot traffic during slow times of day. Visit during happy hour and pay with your Starbucks app – which is attached to your loyalty account – and get a discount.

Make sure to pay attention, though, to how well the program is working for you. As Starbucks found out, the happy hour idea drove traffic, but because it initially focused only on the labor-intensive Frappuccino drinks, it caused actually created problems for the stores. Because the goal – to drive traffic – was met, Starbucks decided to alter the promotion to include more drinks, easing the pressure on baristas but still reaping the benefits of the increase repeat customers.

Freebies for Membership

Everyone loves free. And free can bring in loyalty customers, even when they weren’t planning on stopping at your business.

Consider offering an incentive of a free item to your loyalty members. At a pizza restaurant, consider including a free drink with every weekday order – for loyalty members only, of course. These small, inexpensive benefits can be the extra incentive a customer needs to decide to purchase from you in that moment.

If you are a salon, provide a free, and quick, relaxing hand massage for loyalty members any time they stop by. While they’re in your store, you can always suggest they make an appointment for a haircut or other service. You can also suggest they try a sample of a product or make them aware of a promotion they might have missed if they hadn’t stopped in.

A well-structured loyalty program offers rewards along the “path-of-purchase” for customers. While a program will encourage sales when a customer might have gone elsewhere, additional incentives can entice customers to visit even when they weren’t originally planning a purchase at all.