Tommy Chapman


Reaping the Rewards: Things to Consider when Setting up a Retail Loyalty Scheme in 2022

Published On: 7 October 2020By 5.9 min readCategories: EPoS System, Retail EPoS, Trends, UncategorizedTags: , ,
Retail Loyalty Scheme
In-store loyalty card

Customer loyalty is one of the most valuable assets you can have, and engaged, loyal customers can be some of your brand’s most influential advocates. As such, it is well worth investing time and money in acquiring, consolidating and growing customer loyalty. Retail loyalty schemes are a powerful and proven way of doing this, and although there is a cost involved in setting them up, it’s an investment that will pay for itself many times over.

The benefits are many, as we’ve discussed previously, but ultimately the primary goal of any loyalty programme is to boost customer retention. In addition to this, they are an invaluable way of providing you with vital information about your customer base.

Things to consider

You’ve decided that you want to set up a loyalty scheme. Good idea! There are different ways you can go about it though, some better than others, and some more suitable for certain types of business than others. Here are a few things you might like to consider:

Signing them up

Loyalty schemes are great once you’ve got a customer to sign on, but what’s the best way of doing this? After all, until they’re signed up, you may not have their contact details to let them know about it in the first place.
In-store, point of sale sign-up can be an effective way of getting your customers on-board. Having store personnel encourage customers to sign-up can be persuasive, especially if your staff are well-briefed on the benefits that the customer will accrue as a result.

You could also include a message on the receipts of new customers, inviting them to register their details and join your loyalty scheme. This method is less intrusive than point-of-sale sign-up, and the customer is likely to see it and perhaps act on it once they get home.

Don’t forget your existing contacts too! If you do have contact details for some of your customers, perhaps if they’ve signed up for newsletters, then let them know. They are already engaged and demonstrating a degree of loyalty, and may happily sign up for additional benefits.

For all of the above, it is a good idea to offer some sort of ‘joining bonus’ as an incentive to give you their details. This should be something that has value to the customer, and which is only available upon initial sign-up, and only once per customer.

Keeping them loyal

So, they’ve signed up to your loyalty programme. Great! But now the real work begins. You need to ensure that they are actually making use of your programme, getting the benefits and cementing their loyalty to your brand.

Tangible, recognisable rewards are absolutely vital. 70% of consumers say that they want to be rewarded for their loyalty . They have to perceive some value to themselves; otherwise, they’re unlikely to remain loyal. People are also increasingly cautious about who they share their data with, and tangible rewards are an effective way of persuading customers to give you their information.

One of the most popular ways of doing this is through a system of loyalty points, but by itself, this will hardly make you stand out. This is where the information that a loyalty scheme can provide you becomes so incredibly powerful. You can use this to understand who your most loyal customers are and how they spend their money.

Research has shown that customer feel more rewarded when they are given exclusive offers that are personally relevant to themselves. This creates a greater emotional impact and greater emotional attachment to a supplier and provides the customer with a greater sense of value. Use the insights you’ve gained from your loyalty programme to tailor your rewards based on the customer’s behaviour; give them offers on favourite brands, or upsell to a better brand in the same category.

In addition to offers such as discounts, you might like to consider other exclusive perks which are available only to members. For example, perhaps you could offer access to exclusive in-store events?

What people would most like from their loyalty schemes that they are not currently receiving are free gifts and treats. 43% of customers have said that they would like these . You will need to decide if this is cost-effective, particularly based on the size of your customer base. One other thing to consider is that rewards that are perceived as being random are sometimes better for brand engagement than rewarding regular transactions.

Getting the most out of your programme

Ok, you’ve got your customer signed up to your loyalty scheme, and you’ve decided how you’re going to reward them. Now you need to think about how you’re going to administer your loyalty scheme to get the most benefit for your business.

Currently, the most popular method of administering a loyalty programme is via in-store tools such as physical loyalty cards. Approximately 80% of loyalty scheme members use these rather than electronic tools such as phone apps. However, mobile apps are increasing in popularity globally, and it is another way of making sure your loyalty scheme stands out from the rest. For most retail businesses, the optimum solution is to provide both in-store tools and an app.

Loyalty rewards can be a useful tool to help support sales strategically. You could, for example, choose to customise loyalty rewards on specific product categories to generate additional interest by awarding extra points for premium products or making items such as gift cards points-free.
You might also want to consider offering special loyalty-based promotions, such as double-points promotions during your low season. This can be a handy way of keeping sales up.

One other thing to think about is the fact that very often your staff are also customers. If you offer a staff discount, you may wish to make your personnel ineligible for your loyalty scheme, or perhaps make membership of the loyalty scheme an explicit part of your staff benefits.

The last, and perhaps the most important thing, is that it is absolutely vital to ensure that you are completely transparent about what your customers will get out of your loyalty scheme. Research has shown that greater transparency, as well as discounts, are the most effective incentives for consumers to share their data with a company.

In conclusion then, customer loyalty schemes can be an incredibly potent and valuable tool. When they’re set up and administered correctly, you can quickly reap the benefits of increased customer retention, brand loyalty and powerful data insights. However, there are many things to consider before you do. You need to have a firm idea of exactly what you want out of your programme, and what your customers will want out of it too.

If you would like help to set up an EPoS system with a loyalty scheme built-in call RMS on 0800 138 0050 or send a message through our contact form.


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