The Importance of Having a SKU-Based Loyalty Program
A stock keeping unit, or SKU, is the number retailers utilize to identify a product and its availability. It can also be associated with any billable entry, including delivery and installation fees, extended warranties, attachments, bundles, product lines, and services. Retailers who implement a loyalty program that is SKU-based have the ability (and advantage) of capturing customer data with each transaction, which can then be used to influence buying behaviour, target and fine-tune marketing efforts and reduce costs.
How, you ask?
1. A SKU-based loyalty program provides detailed consumer receipts, enabling you to gain a more accurate understanding of your customers and in turn strengthen your relationships with them. This type of program generates a significant amount of data about each loyalty member allowing retailers to segment customers and deploy relevant and targeted marketing messages.
2. When purchases are tracked at the SKU level, retailers can tie rewards or discounts to specific purchases. This builds even greater loyalty and will boost customer retention. Understanding what your most profitable customers purchase and why is essential to deepening your relationships with them. Plus, SKU-based loyalty programs allow retailers to drive the sales of specific SKUs.
3. SKU-based loyalty programs also give retailers a competitive advantage because it allows them to create unique promotions that a) will stand out from the competition and b) give consumers an incentive to continue doing business with you. Examples of innovative promotions retailers can run include buy-one-get-one-free, bonus points for featured rewards, rewards at random, and double/triple point promotions on a specific day or at a specific time.
4. Thanks to today’s customer engagement technology, retailers can combine a SKU-based loyalty program with other marketing tools, such as email marketing and coupons, and reduce costs earmarked for a variety of monitoring and reporting tools. With the benefits of collecting data via a SKU-based loyalty program software, retailers can target marketing efforts based upon probable responses and purchases.