Is a High-Tech Customer Loyalty System Right For You?

Q: Are the new high-tech customer loyalty systems worth it?

A: The short answer is yes, if only for the customer analytics they provide. With such systems, customers sign up online; after that, you’ll know exactly when they’re in your store, what they bought and how quickly they redeemed the promotional offer that brought them there.

For a more detailed discussion, we turned to Flora Delaney, president of Delaney Consulting in Edina, Minn., who works with retailers such as PetSmart on business development.

How do I implement a tech-powered loyalty platform?

Let’s back up. Before someone becomes a loyal customer, they have to be aware of your business. That means traditional awareness efforts, like advertising, are already in place, and your promotional offers are bringing in new customers. These need to be activated, especially for new retailers, before you can even think of investing in loyalty systems.

OK, I’ve got awareness and promotional offers in place. What’s next?

Ramp up your customer service. Nothing beats outstanding customer experience for generating loyalty. If you and your staff aren’t consistently anticipating and providing friendly, helpful, competent service, you’re wasting your money thinking that a loyalty system is going to fix things.

So I might not even need a loyalty system?

Depends. Once the customer service experience is in place and supported by everyone from managers to part-timers, a loyalty system might work to drive more sales. There is no program that will tell you if a 20 percent discount on the next purchase is more effective than a “buy four, get one free” promotion. Through testing, you’ll determine whether your loyalty promotions change behaviors for customers or just reward them for behavior they would do already.

Fortunately, the loyalty program’s analytics will quickly help you see if the reward you’re offering is positive for the business. And you can speed up this learning process by making your offers substantial and desirable.

Assuming I go the tech route, how do I choose a vendor?

When considering vendors, find out how well their system integrates with your POS and CRM systems. Your CRM system could be as simple as MailChimp, Constant Contact or Robly, or more robust, along the lines of Salesforce.com or Zoho.com. Whatever you choose, you want the loyalty program to work with systems you already use.

Beyond that, make sure the platform offers and tracks loyalty points and status and lets you print promotional messages on your receipts. Next, work on your marketing plan to determine how you want your loyalty program to interact with your customers. Will you use email or some other message outreach?

Last tip: You have to be able to afford the program in the first place, and you should expect to see a positive ROI from a successful system within a year.