The Importance of Membership Programs

Posted By
BDO

Loyalty/membership programs have been a staple of supermarkets, fashion stores, airlines, and coffee shops for years, typically in the form of credit cards or special cards to reward customers and incentivize repeat purchases. Standing out in today’s world of choice isn’t easy. Earning consumer devotion to a brand or store takes more than just offering a good product or good service. A great loyalty program can play a deciding role in a consumer’s decision-making process. For instance, Starbucks Rewards has significantly contributed to the coffee giant’s growth and profitability.

But loyalty programs have proliferated and are reaching their saturation point. How can retailers build a program that stands out from the crowd? Here are four factors that can make the difference:

Are you building relationships or managing a list?

Loyalty programs are most effective when they make use of technological options and focus on relationships, not just incentives and points. Are you using a proper customer relationship management and system capturing as much data as possible, or are you just recycling an email list?

Are your perks new and interesting?

Loyalty programs are strongest when they foster a relationship between consumers and retailers by offering innovative perks that are meaningful and not easily accessible elsewhere. Perks are not just discounts or points but part of a broader loyalty strategy targeting individual shoppers and their segments.

How soon are your customers receiving their first reward?

The answer should be: right at the time of sign-up. Today, customers don’t want to wait for anything.  Also, the first redemption level should be lowest to tempt buyers. For example, Guess offers 50 bonus points on registration and makes you eligible for an additional 15% discount on your first online order, whether it is for regular-priced or discounted merchandise.

Is your program understandable?

When customers stop using a loyalty program, it is usually because the program is too complex and time-consuming to manage. Do your customers clearly understand what’s required to unlock incremental benefits? Are your perks and rewards easy to manage (e.g., they don’t expire) and redeemable online, in-store, and via mobile device?

Of course, any strong loyalty program requires a solid technological foundation. A robust, scalable and flexible application platform for physical stores, apps, online and social media enables a retailer to adapt as its consumer preferences change.

CRM solutions from BDO take care of member management with multiple models incorporating combinations of points, tiers, subscriptions and rewards, such as:

  • Cash back
  • Free shipping
  • Free gifts
  • Discounts or rebates
  • Flexible return policies
  • Upgrades
  • Exclusive member only offers

If you’re interested in building stronger retail customer relationships, BDO can support you with the right advice and right technology solution.


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