Customer Loyalty in the Store of the Future

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Customer Loyalty in the Store of the Future

As a small business owner, you’re probably feeling overwhelmed with the changing nature of your industry. And it’s no wonder. Three decades ago we shopped in person – from store to store, using paper coupons we clipped from the Sunday paper. Today, we rarely set foot in a store, enjoy the ability to automate purchases and feel rewarded by stores who seek our loyalty with personalized offers.

What is customer loyalty?

Hubspot defines customer loyalty as a “customer’s willingness to buy from or work with a brand again and again as the result of a positive customer experience, customer satisfaction and the value of the products or services the customer gets from the transaction.”

Simply put – your customer becomes Arnold in The Terminator . . . “I’ll be back.”


What is a customer loyalty program?

It’s a way of rewarding repeat customers with discounts, free products, advanced merchandise and other valuable treats to thank them for their time, interest and dedication.

Is a customer loyalty program the same as personalization?

Your store’s customer loyalty program is a part of the personalization strategy – not the entirety of it.

Is a customer loyalty program an essential part of business in the Store of the Future?

Not necessarily, but it is a great thing to have in place. According to a study by Bain & Co., “65% of customers say the ability to earn rewards actually changes their spending behavior.” Think about it . . . when was the last time you used your credit card instead of your debit card to earn miles on a purchase?

What makes an effective loyalty program?

  1. Keep it SIMPLE. Customers aren’t signing up for a calculus problem. Choose one of the most popular systems: points, tiers, social media or paid, and then make it as straightforward and easy to understand as possible, like 1:1 ratio for points and dollars.

  2. Celebrate your customer richly - in small increments. A high-quality prize delivered at reasonable intervals keeps your store top-of-mind. That’s because the structure makes earning a bonus realistic and attainable. If a customer feels like they can’t earn your reward, they won’t participate.

  3. Partner with other lifestyle businesses to sweeten the reward your customers can earn. For example, a furniture retailer and an interior designer complement each other perfectly.

  4. Add extra incentives for brand evangelism. After all, word of mouth is king when it comes to commanding viable audiences. Give the people who shout you out a little something to say thank you!

  5. Allow customers to skip the earning period with paid perk status. For a nominal fee, customers can upgrade their program to begin receiving rewards immediately – whether free shipping or discounted merchandise.


Why should I reward loyalty?

In a word . . . money.

  • It’s more affordable to sell an existing customer than attract a new one.

  • Returning customers spend 67% more than new customers.

  • Loyal customers refer friends and family members. These referees (not stripes and whistles) spend more on their first visit to your store than the average customer.

Whether you create your own customer loyalty program or work with a service provider, your goal is to increase customer happiness and retention. After all, there is a lot of noise out there competing for the attention of your clients. So, find a nice way to thank them for their time and dollars and you’ll deepen your connection to create added loyalty for many profitable years to come.