Loyalty Marketing Setup on Mobile
For any company putting a loyalty program in place should work to not only receive returning customers but in increase their total overall purchases.
What’s the current state of your customer loyalty program?
How often do your loyal customers do business with you?
What can you do to increase their total overall purchases?
Figure out what you need, the best (cheapest) way to get a good loyalty program that works for you, and how to easily convince your customers to use the darn thing.
Loyalty marketing is now easier than ever with a mobile set up
Customers like to be rewarded for their loyalty to you, especially if you can do that in a way that is not only convenient for them but actually targets what they want to see as a reward for their loyalty to you.
The loyalty program as we know it was really invented by the grocery stores in the late 90s, early 2000’s – there were certainly customer appreciation programs before that, but connecting a phone number with the program and using the phone number as the identifier, that’s truly genius.
First thing, it meant that customers no longer needed to carry around cards or key fob things, and they were always identifiable with something they knew very well, that of course, being their own phone number.
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Loyalty program usage by multiples of thousands, just a giant stride forward for the concept. Supermarkets were also quick to give out discounts to loyalty program users, and that encouraged more people to shop with their loyalty connection.
And the added benefit to the stores – even more than making the shoppers happy – was the ability to understand inventory and begin to target based on demographics.
If you knew that a shopper who lived in a certain area – ] was going to buy product A – let’s say it’s frozen chicken breasts – and that a large percentage of those people would pair it with product B – potatoes, for the sake of argument, then a logical process would be to offer customers a discount on Product C – perhaps a sauce or seasoning mix designed for chicken.
And while there’s profit in the chicken and potatoes, the real profit for the store comes in a couple of ways. Inventory control and prediction becomes more real time and less about stocking large amounts of items that might not be selling and you could do this based on trends.
Then you add in the product combo promotion we just described and now you’ve got a high profit product – product C, the seasoning mix – and you’ve just managed to increase the per ticket sales per customer, keep the profit margin good on the chicken and potatoes, and offer the add on of the seasoning mix as an enticement to buy the chicken (and therefore the potatoes).
This is the basic premise of how a successful loyalty program works, the next thing are automatic promotions like BOGO to reduce dated inventory, and then we move into geo-targeting and proximity marketing to further manage inventory while giving customers something special as they would see it.
How can you translate all this into a loyalty program that doesn’t cost an arm and a leg? We obviously think it’s through mobile wallets and leveraging existing technology on the cheap to build a program that suits your needs and makes your customers smile when they are either saving money or getting a bonus.
One other amazing innovation that’s been moving to the forefront since these programs started is the absolute tethering of mobile devices to our bodies. Most of the people I know will leave the house without their wallet and figure out how to get through day. If they leave without their phone, they turn around and go back home to get it.
And because we’re so tied in with our mobile phones now, it makes it a no brainer to extend the loyalty program onto the phones and make it even easier for customers to benefit in a variety of ways.
Kind of like, no one ever forgets their punch card if it’s in their phone, do you see what we’re saying?
And example is Pinkberry; they used to have these little paper punch cards and you would get a punch for each yogurt you bought. I, of course, could never remember to stick the stupid thing in my wallet, so I’d have 5 or 6 of them with 2 or 3 punches at any moment laying around. Then I’d have to take them all to the store and have them combined into a single card. Sometimes the employees weren’t too keen to do it since the rules technically prohibited it.
Then PB went to a plastic card setup, and that was even worse, since now instead of little pieces of paper, we’ve got plastic cards around the house. I was so, so, so glad when they just went to phone numbers. It was their POS system, they were limited in what they could or couldn’t do, and this was reasonably in the days when mobile phones weren’t on everyone’s fingers like now.
Now, if you walk into the PB, you’re only going to need your phone. They use Apple Pay – also part of Apple Wallet – as a payment method, and they have their loyalty program built right into the phone. The only drawback I see to their program, aside from us not being the vendor, is that they should use the Apple Wallet to manage the loyalty -especially since they are taking it as a payment means.
So you can set up a loyalty program to monitor sales per item – you know like Buy Ten Get One Free, or as points, where each dollar spent is equal to a certain number of points – 10 to 1 or similar, usually, and when a customer reaches a specific number of points they can cash them in for a discount or a freebie.
Either one is easy enough to execute but you, the business owner, want to determine which idea works best for your traffic and customer base. We usually find that fast casual restaurants, for instance, do well with item counts – buy ten tacos, get a free taco – that type of thing. Retail stores selling merchandise with a varied pricing structure might lean more towards points – like Sephora does, for instance – and work the redemptions from that angle.
Once you’ve figured out what the best approach is to your customer demographics, then it’s time to add a couple of bells and whistles – these are things like lock screen notifications, geofencing or iBeacon style proximity marketing.
You are also not limited to just loyalty with some systems (ours, for instance), and you can often do additional promotions like proximity based coupons or offers – something that averages better than 60% redemption rate almost immediately if you present the shopper with a lock screen notification when they are nearby your business location, or can do the purchase online.
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You can also push events and opportunities for non-purchase rewards as well. If you’re a clothing retailer, perhaps you’re planning to have a trunk show and you’ll be serving champagne and h’ors d’oeuvres at the event – sending a lock screen notification to your loyalty customers letting them know you’re doing a free bubbly and nibbles event with a high end designer is often more attractive than pushing them to come in and buy something expensive.
There is just a tremendous amount of creative marketing that you can with loyalty, and if you tie it into mobile, that’s really where your hook is going to be. We set up customized programs for all kinds of business owners – everything from country clubs to retailers to restaurants, and that’s just a fraction of the list.
We’re always happy to talk about using loyalty as a marketing tool and we would, of course, be happy to talk to you about how your business can creatively use mobile loyalty and offers to kick off your next campaigns.