New Tactics for Boosting Loyalty Programs

ALEXANDRIA, Va.—With the changes going on in grocery marketing today, many retailers struggle to present a clear, compelling value proposition to customers, reports Progressive Grocer. Should you compete on price and cut even more into your margin? Or instead double down on specialty products and risk alienating a huge portion of the overall market? One thing is for sure, anyone selling foods or groceries must to adapt to the modern shopper.

Customer expectations have changed. Today, value is much more than just price and convenience. Today’s customers expect personalization, engagement and even technical and emotional experiences. Although there’s no substitute for providing quality in-store service and product selection, retailers have other tools available to help differentiate themselves and to build those connections with shoppers.

According to a 2016 study by Nielsen, 34% of American shoppers choose their favorite grocery store or primary retailer based on the company’s loyalty program. Forget the days of Green Stamps. Today reward program catalogs are online, and point tracking and reward fulfillment are automated. For most retail grocers, modern loyalty programs provide:

• An easily communicated value proposition
• Online platforms for keeping customers engaged
• New channels—and a compelling reason—for communicating with customers
• Tools to collect customer data and analytics to personalize their value offering

The idea that noncash rewards can influence buyer behavior may seem overly simplistic, but prizes, promotions and rewards have been a mainstay of American loyalty marketing for 100-plus years. Research has shown that noncash rewards produce impactful, long-lasting changes in behavior at three times the effectiveness of monetary incentives, such as cash back or discounts.

For retailers who sell food and groceries, rewards can help differentiate their stores from competitors and build buyer preference. While many independent grocers don’t have the infrastructure to compete for ecommerce dollars, they can compete for mindshare and brand engagement online.

The ability to earn rewards will inspire customers to visit a retailer’s loyalty program website, which can be a stand-alone digital hub, a mobile app or an integrated part of the company customer website. Adding games, such as daily trivia or limited-time bonus point promotions, keeps customers coming back to the site in between reward redemptions.

Finally, customer loyalty programs can be a rich source of customer data, which grocery retailers can use to form their sales and marketing strategies. Custom registration forms or customer surveys can gather relevant data, from lifestyle and demographic information to customer interests and buying habits. The data can be sorted by store, region or customer type and integrated into existing customer relationship management metrics. It allows retailers to personalize their marketing, re-engage customers and provide relevant support to facilitate the journey from part-time shopper to brand enthusiast.

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