Customer loyalty programs—sometimes called frequent shopper programs—reward customers for their continuing business. When well-designed, the loyalty programs motivate customers to keep coming back in order to obtain the rewards. Overall, the reward most popular with customers is a percentage discount on future purchases of items selected by the customer. Other popular rewards include discounts on items selected by the retailer and a free gift when a certain number or dollar value of purchases have been completed.
One selling point for shoppers often overlooked by retailers is the sense of prestige that participation gives. According to researchers into frequent shopper programs at the University of Pennsylvania and University of Southern California, people like to be recognized for store loyalty.
So to get the most from frequent shopper programs, be able to answer "Yes" to these questions:
1. Do the enrollment materials, the enrollment procedures, and the participant card all clearly refer to the customer as a "member?"
2. Do you have multistep programs, in which a member can move from green to gold status, for example, by increasing the total amount and/or the frequency of purchases?
3. When the customer shows the card to the cashier at the time of checkout, does the cashier give extra acknowledgement, such as looking at the customer, smiling, and saying, "Thanks for being a green step member?"
Bruce D. Sanders, PhD
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