Every business wants loyal customers who return time and time again. Aside from the fact that it costs five times more to acquire new customers than it does to win repeat business, longstanding customers spend up to 67% more than new ones.
So customer loyalty represents the greatest of all win-wins – it helps to cut costs AND boosts revenue.
No wonder so many businesses seek to incentivise loyalty with rewards and VIP membership schemes. Loyalty programmes also help the bottom line directly – according to McKinsey, the average customer spends 62% more with a brand after signing up to a loyalty scheme.
The value a loyalty programme can return to a business is potentially huge. But there are a couple of barriers that can hold schemes back. One is getting customers to sign up in the first place. The other is making sure that the rewards and incentives you offer come across as a good enough deal to actually raise a customer’s overall spend.
POS can play a big role in overcoming both of these hurdles, helping to turbocharge the value you get from your loyalty scheme. Here’s how.
Offer flexible sign-up options across multiple touchpoints
Point of sale is the natural place to get a customer to sign up for a loyalty program. They’ve just completed a purchase, presumably they are happy with the experience they’ve had so far. There’s a good chance they will be open to joining your scheme and getting the benefit of reductions on future purchases.
Conventionally, this is an interaction that takes place between a sales assistant and a customer as a purchase is processed. If the customer agrees, details are taken, typed in via the POS interface, and stored in the loyalty programme’s database. There might be a card activated or an email sent, or a QR code to download an app.
This is fine. But it doesn’t have to be the only way you invite customers to sign up. Modern POS solutions offer plenty of touchpoints where this can happen. And if there’s one thing consumers like, it’s choice.
Some people, for example, might not like the feeling of being ‘put on the spot’ being asked whether they’d like to join a loyalty scheme at checkout, and automatically decline as a result. Kiosks give people time and space to make decisions at their own pace. This is one reason why average purchase values through kiosks are estimated to be between 12% and 20% higher than those made through staffed tills in some sectors. You’d expect asking customers to sign up to a loyalty scheme via a kiosk to have a similar effect.
Another factor that could put some people off is the time it takes to provide details, filling out a form etc. If you are in a hurry, this is a major obstacle. Businesses can get around this by offering instant digital sign ups. Some of the latest loyalty software integrates with digital wallets so all customers have to do is scan their smartphone and the rest is done for them.
And why restrict yourself only to paying customers? Who’s to say that people just browsing today might not be interested in signing up for your loyalty scheme with future purchases in mind? You can accommodate these people with kiosks set aside specifically to use to sign up to your loyalty scheme. Or by equipping staff with mobile POS tablets so they can offer to sign people up as they move around the premises.
Keep customers informed about their points and rewards – and target them with personalised deals
Most modern loyalty schemes accrue points and rewards automatically. The old methods of manually stamping a card or updating an account were prone to human error and could end up putting people off the schemes altogether.
While automation is a great step forward, another question arises over keeping people informed about how many points they have or if they are in line for a gift or offer. From the business’s perspective, you want customers using their points at every opportunity. That’s what drives value from the scheme. The best way to do that is to keep customers fully informed about the status of their account.
Whether at a staffed checkout or kiosk, flashing up current points on a customer-facing screen is an easy way to remind customers of their loyalty status. They might be pleasantly surprised at getting a discount on their current purchase, or get an incentive to increase their purchase value if they see they are close to winning a reward.
The same goes for personalised offers or targeted suggestions. Once you have captured a customer’s details through your loyalty program, every interaction is logged in your CRM. This data can then be used to make informed recommendations or special offers that are tailored to that person’s preferences, making it more likely that they will take it up, and again boosting the average order value.