Loyalty programs seem like such a no-brainer. For any industry where the products and prices are similar, why wouldn’t a consumer go to the store where their purchases earn them something?
Of course consumer feedback can provide clues that can help, but that’s not the real problem.
The primary problem with loyalty programs not working for you is that the programs aren’t actually about consumer loyalty.
Sure consumers are happy to be in a company loyalty program and earn rewards, but with industries like retail liquor stores, convenience and service is what creates loyalty.
So why do so many companies have loyalty programs? It’s about the data! Gathering consumer data, analyzing it and then improving for the overall consumer experience and profitability.
For example, all the big grocers have loyalty programs, but with or without the rewards, most consumers go to the store in their neighborhood anyway.
It works for them because grocers have teams of people analyzing the data to determine what product sets each store should have, the purchasing behavior of their most profitable consumers, provide valuable feedback into category management, and more, and more, and more.
They analyze the data and make changes to achieve their goals.
And it results in happier consumers and larger profits.
Loyalty programs are great to encourage each consumer to identify themselves (& earn their rewards), but success is measured by:
- gathering the consumer data,
- analyzing the data, and
- improving the consumer experience and making more money.
Finally, do you think the big stores would offer loyalty programs if it didn’t actually translate into higher profits?
Now you might say, “Hold on, I don’t have teams of people.” And that’s certainly true. That’s where BottleRoom 3 can help. We gather the data, do the analysis and improve the consumer experience. But rather than category management, we focus on customizing the experience for each individual customer – recommending products they would be interested on their visit to the store (along with recommendations of other products they might want to add to their basket). This creates a more personalized experience for them that translates into customers passing one store to come to your store, increasing basket size by cross selling, influencing buying decisions and overall increasing revenue per square foot.