3 ways to rejuvenate a loyalty program
January 13, 2014

As businesses in the U.S. retail industry compete for more customers, gift card programs and loyalty programs will make all the difference in ensuring long-term sales growth.

A recent report from The New York Times said many major retailers have focused heavily on improving their customer retention strategies in recent years. Specifically, businesses are looking to loyalty programs as the safest and most consistent way to maintain strong profitable revenue streams. The newspaper said such efforts have paid off, as some of the nation's top brands have reported more than half of their total sales are coming from rewards programs in which shoppers are encouraged to keep coming back.

Small companies can also benefit from placing a high priority on getting loyal customers to return as opposed to devoting valuable resources to more complex efforts to attract new shoppers. Expanding the shopper base is often an expensive process that rarely produces immediate results. Instead, here are three easy ways small and medium-sized retailers can kick-start an effective rewards program:

1. Prep the back office with payment integration
Introducing a new customer retention strategy into an ongoing operation can be a challenging process without the proper technology and equipment. By investing in an integrated payment system, store managers will have a much easier time processing transactions from new channels. These interfaces can collect information from shopper loyalty cards in addition to other forms of payment.

2. Supplement the program with stellar customer service
According to an infographic compiled by the communication technology company Drumbi, the quality of the entire retail experience plays a major role in determining whether a customer will return in the future. In other words, even if a retailer introduces a new loyalty program, it may not single-handedly contribute to an increase in sales. Managers must be sure to maintain high standards for customer service to support any ongoing rewards initiatives. Rewards cards are simply another tool in the overall effort to improve sales.

3. Maintain an active presence in the eyes of shoppers
Loyalty programs are also known to work best when companies use them to engage directly with shoppers on a daily basis. The Drumbi infographic found 16 percent of consumers said the brands they interact with are hard to reach on social media. However, the data also showed people are often inclined to spend more money when stores are more approachable on multiple channels.

Nexus: G-WEBCD5