Helen Cahill, chief success officer at customer engagement and loyalty company Coniq talks choosing the right loyalty scheme for your mall.
Any business owner knows the importance of customer retention, and so it should come as no surprise that companies with strong loyalty marketing programs grow revenue 2.5 times faster than their competitors. With this statistic in mind, Helen Cahill, chief success officer at customer engagement and loyalty company Coniq, says the emphasis for success is very much on the ‘strong’. So what makes a strong loyalty program?
“Most importantly, it must attract your customers,” Cahill states. The principal of how you do this, she says, is simple. First, ensure the benefits are simple to understand so a customer knows immediately what they must do to be rewarded, and what the reward will be.
Second, the reward must be valuable enough to justify the effort of signing up and continue to use the loyalty program time after time. And, she says, a truly “strong” loyalty programs is one which, over time, can be automated for replication once it produces successful results.
The template is straightforward enough, but there is more than one way to skin this proverbial cat. There are, says Cahill, numerous ways to go about creating a loyalty program in a retail space, and deciding upon which one will depend on the specific goals you are working towards for your shopping centre, whether it is to attract more customers to your mall, increase dwell time, target specific demographics, or build customer engagement.
Types of Loyalty Programs
Virtual currency program – Transactional loyalty programs to earn money off your next buy, for example spending £500 to receive a £5 credit allocated to your account which can be redeemed against a future purchase.
Points collection program – A points based mechanism, where loyalty members earn points for taking certain actions, where the points can be converted to awards such as 50 points for a free coffee.
Stamp program – A stamp/token/star is awarded to customers who take certain actions e.g. making a purchase or visiting the information desk. Stamps are capped at a certain number and then the entirety of stamps collected is redeemed against a reward.
Tiered loyalty scheme – Once a member spends a certain amount, or makes enough visits to a mall, they rise to a higher tier which unlocks different rewards/experiences. Points are cumulative and redemption of an offer does not reduce their total, instead allowing them to continue rising through the tiers.
Tourist program – Giving special discounts or rewards for your tourist shoppers to attract new shoppers and enabling you to understand where your tourist shoppers are coming from, how often, and where they are shopping.
Paid program – A pay to join scheme where members they receive discounts, offers and invitations to members-only events. As members have made an investment into the loyalty program, they are more inclined to use it.
Surprise and delight program – An emotional program where shoppers are offered targeted rewards based on their behaviour and predicted value. The key element is to surprise members, rather than allowing them to select offers from a catalogue of available rewards.
Gamification program – Gamification elements are used to unlock a specific reward, for example shop at the centre 3 times over the summer to win a gift voucher, or shop at 4 stores in one day.
Cahill says that many of the programs can be combined to make the “perfect” loyalty program for your shopping centre and customers. “For example, a points program, with a tiered structure that unlocks targeted and experiential rewards will create both solid transactional loyalty, as well as more deep rooted emotional brand loyalty,” she explains.
“Gamification could then be used to drive a repeat visit during quiet times, and then an Invitation Only tier could be launched in specific centres to give extra special treatment to certain VIPs. This means that the loyalty proposition can evolve from centre to centre over time with no additional cost or complexity.”
She advises that if your goal is focussed around driving trade from existing customers, a simple mechanism is best to encourage customers to spend more per visit in your shopping centre. For those struggling to get customers to your mall, awarding points based on visits is a cost-effective way to entice members to visit.
Offering experiential rewards such as food and beverage driven incentives will improve dwell time, rather than just monetary offers, Cahill says, adding that it is important to include high-ticket incentives, such as a personal shopping experience, to entice high-earning shoppers to spend more.
Above all, she says, it is essential that your loyalty program allows you to collect data on your customer’s shopping habits, and that this data is used to inform your marketing campaigns.
“Segmenting your database into groups of like-minded individuals and sending only the offers/content that they will be interested in based on their past behaviour will generate much more interest and loyalty to your centre than one-size-fits-all emails,” she explains.
“Having an online platform for information and rewarding customers allows you to form a shopping centre brand that your shoppers can feel attached to. They will therefore naturally want to do more of their shopping with you.”
Designer loyalty schemes
While shoppers are as yet unable to enjoy a day out at their favoured retail destination, London Designer Outlet (LDO) decided it was increasingly important to take every opportunities to remain front of its shoppers’ minds so that it can welcome them back as soon as possible, and so rolled out Coniq’s Customer Relationship Management (CRM) system last September in a bid to collaborate with and support its brands.
“Having this enhanced CRM in place helps us better get to know our guests, understand what their favourite stores are and then entice them to visit us (when retail is open) with attractive offers, driving footfall to our stores and helping brands boost their sales,” says Sue Shepherd, Realm’s general manager for LDO.
“The results between roll-out and Lockdown 3.0 have been very encouraging (even bearing in mind Lockdown 2.0 was during that time). Brands saw an increase in transactions and a direct uplift in footfall because of the intelligent targeting and guest loyalty aspects of what Coniq offers, with particularly strong results experienced by brands such as New Balance, Zwilling and Skopes.
She adds that using digital to support the physical should be a part of every retailer and every destination’s strategy: “The future of bricks-and-mortar retail is one that embraces the opportunities that technology like Coniq brings. Destinations like London Designer Outlet understand this – and it’s why we’re confident that, when the pandemic is behind us, our brands and our guests will benefit accordingly.”
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