Rewards programmes have quickly become the trend in retail stores, but are they really worth it? Do retail outlets benefits from rewards programmes, or do customers take complete advantage of the system? Before initiating a rewards programme, it is best to have a good understanding of the pros and cons of such, and how it can affect your business.
With the existing threat of online shopping, retail outlets need to take a careful look at how rewards programmes can affect their bottom line – time and time again, loyal customers prove to produce more revenue than casual shoppers but how does one go about implementing a rewards programme that encourages that shopper to spend more while still benefiting from the system? The goal would be to implement a system that allows the business and customer to benefit, and ensuring that they keep returning to purchase. Let’s take a look at whether a rewards system is a lucrative option for your business:
Offer more than just discounts
Traditionally, retail outlets have offered discounts as part of their rewards programmes, which can lead to an imbalance in stock and reduced margins. Today, offering discounts simply won’t attract a satisfactory number of customers. Instead, shoppers are looking for something a little more appealing such as a free product or gift. It is important to remember that, because rewards programmes are so common, a poorly designed strategy can result in some customers turning away from the brand or product. When mapping out a rewards programme, it is important to ensure that you’re offering something unique.
Get to know your customer
The best way in which to gauge whether or not a rewards system is right for your business is to know what you customer is looking for. If you haven’t any idea about your customer’s needs, preference, purchase frequency, and how they like to shop, the chances are high that you won’t be able to formulate a rewards system that will work – this is where your retail solution will guide you. However, if you do know your customers and have a deep understanding of their needs and wants, you’ll be able to create a rewards programme that speaks directly to their behaviours. If you’re looking for ways to get to know your customer’s better, you can use your retail management system to learn more. A retail management system will allow you to extrapolate data that pertains to customer needs and purchase patterns.
Encourage the kind of behaviour that will bring in business
Once you have a better understanding of your customer, you can begin to encourage the kind of behaviour that will allow your rewards system to flourish. Do you want to push your customers towards buying more often, make bigger purchases, try out new products, or refer others to your store? The best way to ensure that you design a rewards programme that works for your business is to nudge your customers towards these behaviours through personal events and content. From this, you will be able to create a truly unique customer experience that will keep shoppers coming back for more. Your retail management system will help you manage your promotions and give you the data you need to track your promotions performance.
A rewards programme can be a highly effective way of retaining your best, most loyal customers and ensuring that they remain loyal to your brand. However, if not done correctly, it can chase your customers away.
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