Customer loyalty is important for any business. Loyal customers will keep coming back to you over competitors, are more likely to recommend you to other people and can provide a substantial boost to your ROI. In the grocery industry, retaining customers has become even more important in recent years, with more options in online shopping providing a challenge for companies trying to keep their customers.
One method that many grocery stores are using is the customer loyalty programme. These programmes often work by rewarding customers every time they shop with the business. This can be done in a number of ways, from offering discounts in-store to providing vouchers and exclusive items. The aim of these programmes is to keep the customer coming back by making them feel like they are getting something back when they shop.
Loyalty programmes have proven to be extremely effective in the grocery industry. In the UK, most major grocery companies offer loyalty programmes, from Tesco’s Clubcard to Sainsburys’ Nectar Points. These programmes are very popular, with a majority of customers signed up to at least one.
Why these programmes are so effective
Loyalty programmes are effective because they give the customer a good experience when shopping. The best grocery loyalty programmes make the customer feel like they’re earning something every time they shop. This inspires them to keep coming back to that company, which is massively beneficial in such a competitive industry. A loyalty programme can be a good way of acquiring new customers, but the biggest benefit is the effect on customer retention. Loyalty programmes are a great way to build up a loyal customer base, and loyal customers are more likely to spend big when compared to new customers. Indeed, increasing customer retention by as little as 5% could increase profits by up to 95%.
Another benefit of customer loyalty programmes is that they provide businesses with an ethical way to gather customer data. Customers will often hand over their details willingly when signing up for the programme, and companies can then use this data to better understand their target audience, allowing them to curate their marketing so as to keep those customers coming back. They can obtain contact information from a customer, such as an email address, which they can use to keep in touch with the customer and alert them to any special offers. Keeping in touch with customers helps build loyalty as it makes them feel like they are part of a family.
Why grocery loyalty programmes increase ROI: Final thoughts
The grocery industry is highly competitive, so any way of increasing ROI should be considered. Customer loyalty programmes are one of the most effective ways of increasing ROI as not only can they attract new customers, they’re also extremely effective at improving customer retention. These retained customers will then keep coming back, often spending more than new customers and acting as brand ambassadors, convincing friends and family to shop with them. Depending on what you offer in these programmes they can also be a cost-effective way of retaining customers, further boosting your ROI.