In an overcrowded and highly competitive marketplace loyalty has become the holy grail of retail.
With so much choice and variety available to customers in numerous guises how can Indies compete when even the big boys of the high street are struggling?
Loyalty isn’t a new concept and there are many examples of how to do it well. Big players such as Boots and Tesco have been working Loyalty successfully for years and it’s clear to see the benefits of such schemes to both the retailer and the customers. But for an Independent who doesn’t have the budget or capacity to deliver complex schemes such as the Boots Advantage Card can loyalty actually work on a practical level for smaller enterprises?
The simple answer is yes and in fact Indies have a distinct advantage over the high street competition.
In the past keeping your customer satisfied was enough to win and retain loyalty. However, in a competitive marketplace where it is only too easy for customers to find an alternative they demand and expect more for their business. If a competitor offers them that little bit more then they’re off. The key to building loyalty is to deliver that little bit extra by recognising and rewarding your best customers with incentives that are relevant to them.
This is where your advantage as an independent comes into play. Indies know who their customer is and which products are right for them. Customers sign up to loyalty schemes because they like to feel special and cherished for their repeat business. The shopping experience of Independents is like gold dust – customers already feel that they receive special attention in store. It’s unique, individual and distinct which makes it very easy to create a compelling loyalty offering that will resonate with customers. Indies know their customers inside out which means developing a scheme that fuels and responds to their needs should be relatively straight forward – the hard work has already been done!
The aim of the loyalty scheme is to generate increased sales and not just be a crowd pleaser! You may develop a fantastic scheme that is incredibly popular with customers but could cost your business a fortune. When devising the benefits of any programme think carefully about what you want them to do – do you want them to simply spend more or are you looking for them to remain a customer? You also need to consider how you can deliver that reward in a cost effective way for your business. For example a way to make customers spend more may be through an incentive that operates over a specific timeframe or is limited for example allowing them to get a free item or discount when they have shopped with you X amount of times. Alternatively if you want to encourage repeat business the offer needs to be based on a mechanism that builds indefinitely like points redemption and continues to engage with them.
Whatever the end game the key to successful loyalty is to create a dialogue with customers that is based upon attractive and achievable rewards. There are numerous marketing devices that can come into play to encourage and build engagement with your brand through email, direct mail and text messaging. Regular relevant and pertinent communication with your customer base helps to develop and cement customer relationships with your brand.
That sounds great in practice but what’s stopping the competition doing exactly the same thing and how do you make sure customers are loyal to your brand above any other? You can’t prevent your competitors from offering their customers loyalty too but you can make sure yours has more impact by leveraging your secret weapon in order to do it much better. It all comes back to the fact that as Indies you know who you are and you communicate it really well. A well-defined and clearly articulated brand promise carried through and delivered in a loyalty scheme will always deliver results. The application of your in store principles of the right product, great customer service and attention to detail to a loyalty programme will exceed your customers’ needs and wants by delivering them benefits or rewards that they are really interested in. This is perceived as added value and makes the loyalty offering infinitely more compelling for the customer. Nothing in this highly competitive marketplace is more powerful than the effective communication of your brand and a loyalty scheme that delivers achievable, attractive and relevant rewards will engage and resonate with your customers.
- To find out more about effective loyalty take a look at our website www.redfishgroup.co.uk or give Marcus a call 0845 862 0416.