As a retailer, we are always trying to figure out how to drive sales. How do we get more people through the door? Larger sales. Add-ons. How can we boost that overall revenue number and have bigger days, month, and years. Like most complex problems, there is a multitude of variables at play in finding the perfect formula for consistently growing sales. Some of those variables are harder to control. However, one effort you can take advantage of if you currently are not is the loyalty or reward program.
Is this a pervasive practice in retail? How many business are using it? How many consumers are subscribing to it? Is it really effective? These are all questions that are pertinent to making a decision on whether or not you should subscribe to this practice. The long and short of it is you should have a rewards program if you don’t. Let’s talk about why.
According to an academic study from the University of Washington, US participation in loyalty programs has reached 2.6 billion participants. This number is easier to comprehend when paired with the average number of programs that at US household participates in… 21.9. So there are lots of people participating in lots of programs. Don’t want to miss the boat, right?
Well, there are some arguments against it. In certain environments there can be a negative effect associated with the concept of inferiority perceived by non-participants when they observe privileges earned by others. Luckily, in the retail world most rewards/points/discounts earned from participation are not flaunted in the face of other customers. This idea of the “negative effects on bystanders” is less applicable in the retail business setting.
So how do we practically put this rewards program in action? Some retailers have had stamp cards, or a card catalog references in place for years. As technology evolved, some people began keeping track on a spreadsheet or using an external service. Many retailers use their credit card processor to process gift cards and a loyalty program, at a premium price.
A better choice is utilizing a POS and inventory management system that has a built-in feature and can effectively provide feedback on program usage and rewards balances. RICS Software is a great choice for people who don’t want to pay extra for a rewards program, but do want to take advantage of a segmented marketing opportunity. Marketing directly to your rewards customers and those who are close to a reward attainment is an effective call to action that you will get a better return on your investment.
So if you’re not taking advantage of a simple way to increase sales and get your shoppers to become more frequent repeat customers, you should. And if you’re looking for help to automate and maximize the benefits of a program like this, you should contact RICS.