Building Loyalty: The One Resolution You Should Keep This Year
With the holiday shopping season well under way, businesses are scrambling to get the most share of wallet they can from customers. Offering deep discounts and slashing prices are the traditional revenue-generating tactics that retailers employ to influence shopper behaviour.
The problem is that this one-time strategy is rarely the answer to turn your profits out of the red and into the black. To differentiate themselves from the rest, some stores attempt to start an attractive loyalty program or give an extra push to their existing one by upping their promotions, like gift cards, points or even cash-back on special purchases. This might attract a few new one-time visits, but if you haven’t been on your customers’ radar throughout the year, why would they suddenly think of you to make those key holiday purchases?
Staying connected with your customers by providing them with truly meaningful and relevant loyalty offers and promoting attractive membership benefits on an ongoing basis to increase subscriptions are two far more reliable and long-lasting strategies for retailers seeking to increase sales, regardless of the time of year.
New loyalty program memberships do see an increase during the holidays, and retailers offering an attention-grabbing loyalty program could see a spike in business due to their loyalty offering. In a recent study of holiday shoppers by Colloquy, 40% of women and 31% of men polled said that when shopping this holiday season, they plan to choose retailers that offer loyalty rewards.
However, the more interesting (and potentially profit-generating!) numbers lie in the findings related to previously earned loyalty rewards. Sixty percent of the American shoppers polled were planning to save money on holiday gift purchases by using loyalty program rewards they’d already accumulated throughout the year. That percentage represents a 22% increase over the 2013 holiday season. The group most swayed by loyalty programs? Twenty-five- to thirty-four-year-olds. Seventy-one percent of consumers in this segment said they would redeem reward points for gifts this year. Millennials (eighteen- to twenty-four-year-olds) were the group with the most significant change from last year: 43% more of them were planning to use points towards purchases this year than in 2013.
In 2013, the National Retail Federation predicted holiday sales to grow 4.1 percent to $616.9 billion, up from $591.7 billion. How much of that revenue were you able to get? How do you plan to secure a larger piece of the holiday sales growth in 2015? Instead of enlisting temporary price cuts and sales for a one-time push during the busy holiday shopping season, use a long-term loyalty approach to more effectively influence consumer behavior. Keep your customers engaged throughout the year with personalized offers and relevant rewards. By making loyalty a constant priority, you’ll stay top of mind and ensure that customers not only think of you when planning and executing their holiday shopping, but also that they’ll keep coming back all year long.