To sum up, loyalty programs, only two varieties: discount or cashback – cash consideration direct client and direct losses for the retail, and bonuses – the same discount, but deferred for the client and more profitable for the retail sector, both economically and from the point of view of motivation to re-purchase. Both are important, because they create a unique story of customer relationships.
Marketing as the traffic police
Initially, the stores and restaurants don’t know about their customers nothing, except their General preferences. This, they have only to calculate the marginal discounts for the customer based on the economic performance of the company. The competent seller can invite buyer to dialogue with subsequent bilateral benefit. In fact, dialogue is the loyalty program that starts with filling out the questionnaire in which the customer specifies their name, gender and date of birth that already allows you to create a targeted offer. Consent to provide your phone number, e-mail or download the application from the seller enables the latter to encourage the client to change his behavior.
Choosing from the same stores, 72% of consumers in the world and 76% in Russia prefer to go where there is a loyalty program, on average increasing the profitability of sellers by 20-30%. In essence, the programs successfully implemented in retail and the service sector. Someone can give a discount for flow and efficiency: for example, when paying fines since cameras commit traffic you can get 50% discount, what you do not have loyalty? But most often we are still faced with motivation where there is the possibility of re-purchase, from purchase of the apartment daily to purchase your favorite coffee on the way to work.
In the West the benefits of bonus programs appreciated for a long time. In Russia it is happening before our eyes: more and more big stores and restaurants redirect consumer excitement in a peaceful direction. The buyer acquiring the goods, for example, for 1000 rubles, receives a “virtual” 100, which he can redeem on your next purchase. The more spending, the more bonus. This is the amount that at least will remain with the company, and at best, will bring her additional income. Cost-effective model, which allows to increase the frequency of purchases and average check. A large part always remains in the next purchase of the client and stimulates him to new acquisitions. Due to the fact that the bonuses will only use loyal customers with frequent repeated purchases, they really benefit through the reallocation of discounts from one-time customers.
The sponsors loyalty
Each buyer in the soul – reckless hunter, but the idea of trophies at everyone. A paradox, but true: adults a couple of years ago enthusiastically joined in the hunt for the “stick” is a small toys trading network “Dixie” was applied to the purchases for every 500 rubles. Then, to please the children and grandchildren, bought up all that was ever necessary and even not necessary at all. Company representatives told “Vedomosti” that in just two weeks they have distributed about 20 million toys. Similar actions designed for a significant increase in check due to the emotional component. Analysts estimate that they can bring up to 5 percentage points of growth in comparable sales. In the Russian market it was one of the best examples of gamification – applying game techniques in marketing.
Just using a Bank card, you can receive a different privilege levels from 5-30% discounts in the partner stores, hotels and restaurants to flyer miles or access to VIP-Lounges of airports around the world. While 37% of participants in loyalty programs are even ready to pay extra for the enhanced level of privileges.
Grocery chains are increasingly making buyers co-authors of their loyalty programs. “Coswell” offers the buyer to determine the product that he can buy at a discount, but the “ABC of Taste” gives you the opportunity to select the product group for higher bonuses, which can then be send to a charity.
As practice shows, the bonus program provides the functionality for building of “useful” communication. For example, the Russian children’s clothing brand Acoola charges extra bonuses as on the date of birth of the parent (after all, he issued the card) and his children on their holiday.
Take care of the consumer should be sellers, but assistance is often needed and to themselves. For those who appreciate the speed of implementation of ideas, in the market there are ready decisions – for example, the base units of loyalty programs that can be quickly integrated into any business to continue to expand the necessary functionality.
Here is an example of the brand of sportswear and casual apparel Under Armour, which originally worked with the discount program, but then decided to change it to bonus. To restart the loyalty program took the company only one month, and in four network recorded an 80% growth of its participants. The company noted that the program gave them the opportunity to flesh out the portrait of the target audience and details to work with her to track and increase the frequency of purchases of regular customers.
In many respects this freedom gives the new technology. For example, the electronic member card loyalty program you can now load in a universal storage Wallet, which saves the client from unnecessary plastic, and the brand of the additional cost of its production. At the same time it is the operational budget by channel for communication between a seller and a buyer. For example, a customer, while at the Mall, where the brand receives a push notification with a personalized promotional offer. As a result, the seller began to better understand the desires of the buyer, which generally affect the overall results of the company.
Another example is a network of women’s clothing stores Concept Club. It long enough worked with the discount program, is also gone from the usual discounts to the bonuses. Less than a year in the new program re-registered more than 60% of customers with discount cards (with an average frequency of visits to the store 1-2 times a year). Already in the transition phase, the company reported that the average check with a bonus card increased by 15-20% relative to the average over the network. However, if the discount card was implemented, only 40% of purchases, with a bonus up to 70%.
A matter of time
Modern man doesn’t have time. This problem was noticed by Dilip Kumar, Vice-President, technology Amazon Go. Do: buyers have no time to understand the complex mathematical structures of loyalty programs, they can twist in daily activities and forget to “cash out” their bonuses. There is a risk that it will cause disappointment. Especially the older consumers, especially in Russia, which was enough denominations and other financial injustices.
With all the consumer excitement and self-centeredness to play the bonus game to receive the award, not all are willing buyers. In 2017, the amount of unused bonuses was estimated at $100 billion. this is evidenced by one of the most authoritative research in the field of loyalty Bond Brand Loyalty, conducted in conjunction with Visa. But if the buyer can remind you in time about its capabilities, and potential enemy will become ally.
According to research by 2018, 87% of Americans were willing to spend time learning the details of bonus programs favorite brands in exchange for personalized offers. However, only 44% of buyers were thankful for our brands for successful use of their bonuses, and only 19% acknowledged that the bonus program made them feel special. This is one of the main drivers of customer satisfaction.
A program that establishes a positive emotional connection with your participants, allow you to increase the average bill of customers by 27%. In this case no matter how the seller does this location due to discounts or bonuses. But as soon as this happens, there is a real market symbiosis: what is good for the buyer, it becomes good for the seller.