For grocers, one of the toughest things to do is keep their customers loyal. Almost all shoppers choose their grocery store based on factors such as convenience, price, and variety of items. To attract customers, grocers need to find ways of improving the consumer experience while contributing to the company’s long-term performance. A loyalty program is a great way to attract value shoppers but is it going to give you the increase in revenue you need to cover the investment?
Leveraging the consumer data
The biggest reason a loyalty program is the best choice for grocers to keep customers is the valuable data that it offers you. Analysis of this data from a strategic perspective helps grocers to identify where the best opportunities are to expand the business from a segment, consumer and store perspective. Customers enjoy loyalty programs because of great customer experience that’s uniquely tailored for them and displays how a company cares about them. Half of the publicity driven by happy shoppers who encourage other people in their group by spreading a word about the brand and the loyalty program they are enjoying.
According to a study, the probability of selling to an existing customer is 60–70%. The probability of selling to a new prospect is 5-20%; (that’s up to 14 times more or 5 on average). [Marketing Metrics]
Research has shown that shoppers who earn points on their loyalty scheme prefer to keep returning to shops to redeem them, contributing towards more increases in sales and therefore the process repeats. Companies who struggle to well use the data they collect find it difficult to achieve long-term revenue growth with a loyalty program. The grocers who use this data effectively usually see a revenue rise of approximately 1-4%.
The success of loyalty programs
Loyalty programs, owing to their guaranteed ROI, are becoming popular. Loyalty program members make up 43 percent of annual revenue for grocers that have loyalty programs. We see members spend more than non-members and, because of the discounts and benefits members get, they can also pay a membership fee for a loyalty program. Loyalty programs are a long-term marketing effort designs to provide incentives to and reward consistent customers. This not only boosts the total order value, but it also increases the time spent by the customers while helping you prevent customers from slipping away to competitors.
Profits get double if customer retention increased by 5%. On average, each business loses 5-10% of its customers each year. It is implausible not to reduce that number, especially when you are thinking about the cost of acquisition towards each customer. You are going nowhere if you don’t have any strategy for customer retention.
Introducing a loyalty program will let you know what is your customer’s current behavior and whether he/she hasn’t been in for a long time and provide you with simple ways to get in contact with them. There are hundreds of reasons the time to adapt is worth a great reward program. It may be the fastest way for the business to expand.
Get in touch with us today to learn how to use your valuable consumer data to build a great loyalty program.
Grocers, Consumer Data, Loyalty Rewards.