In an increasingly competitive commercial world, knowing the customer well has become a priority. Knowing what holds them off or motivates them, what devices they use, and their behavior, is essential to build a customer profile.
There are quite a few food retailers that have realized that Loyalty Programs are an effective tool to grow the business. Loyalty Programs help retailers develop their customers, increase customers’ trust in the brand, and give retailers useful feedback for the construction of a customer profile.
Retailers that run loyalty programs have much more customer, product, and category information than retailers that don’t. Usually, knowing the best and worst-performing categories is easy, but retailers with loyalty programs are able to go beyond category performance thanks to the data collected. For example, retailers that run loyalty programs are able to analyze data and learn specifically which customers aren’t happy with their frozen products and how long it’s been since their last purchase. The amount and accuracy of the information retailers gather have increased significantly and accelerates business decisions.
The different options that a customer currently has to spend their money on are practically unlimited, which is why it isn’t useful for retailers to offer a discount on a product they want; but retailers must create offers to the product the customers want the most. How retailers offer a product is key to a good job loyalty strategy, listening to customer feedback, and analyzing customer behavior are also good tools to retain customers.
This is where Loyalty Programs come into play. According to Allied Market Research, the global Loyalty Management market is forecasted to reach $6.95 billion by 2023, with most of its growth in small and mid-sized organizations.
Loyalty in numbers:
- Attracting a new customer is 5 times more expensive than keeping and incentivizing one we already have.
- An increase in retention of 5% means increasing profits in a range of 25% to 95%.
- A loyal customer is 50% more likely to try a new product and will spend around 31% more.
It’s clear that loyalty programs contribute to increasing the business’ profits. However, to guarantee good results, they must be combined with a customer success strategy, which is based on personalization and segmentation. This is the complete opposite of those average loyalty clubs in which the customer is just another number in a database. Thanks to current technology and tools such as Loyalty Platforms, the possibilities for food retailers are greatly increased. The customer experience is the key to improve customer loyalty. It must evolve from trying to satisfy everyone in a general way, to looking for the individualized prize, only achievable through personalization.
In the end, loyalty programs have a cyclical process, in which it is necessary to collect information about the customers to offer them better rewards, from which the retailer will obtain feedback to update their database. In this way, they will be able to personalize their offers even more while making them more successful and more popular. This will help food retailers differentiate themselves with a variety of offers that only increases day after day.