A CUSTOMER LOYALTY PROGRAM that works well helps level the playing field with online competitors and big-box retailers. But who wants a level playing field? You want one that tilts to your advantage, and tweaking your loyalty program can do that.
A loyalty program may be the deciding factor for whether people walk in your store and how much they spend, Nielsen’s 2016 Global Loyalty-Sentiment Survey found. And loyalty members generate 12 to 18 percent more revenue for retailers than non-members, according to 2016 research from Accenture Interactive.
We talked to five retailers who shared their strategies for creating programs that keep customers as loyal to their stores as their pets are to them.
1. Go Mobile With a Fun App
Customers at The Hungry Puppy in Farmingdale, NJ walk to the register and hand their smartphones to the sales associate without being asked. They’re eager to get the reward available only to those who have spent $75 and have downloaded The Hungry Puppy app. They are immediately rewarded with a virtual scratch-off ticket to rub off right on their phone screens. Every scratch-off is a winner with $3 to $10 in Pup Bucks to be used at their next visit or an entry into a monthly $100 gift basket raffle.
“People buy more because they want to qualify for the scratch-off,” says Frank Frattini, The Hungry Puppy’s owner.
Creating a loyalty program through an app is a strategic decision to stay competitive in an increasingly mobile world. The 2016 Bond Loyalty Report, a survey of nearly 12,000 U.S. consumers, found that 57 percent of members would like to engage with loyalty programs via mobile devices.
“We wanted ours to be the first one,” Frattini says. “If customers download our app, they aren’t as likely to download PetSmart’s or Petco’s apps.”
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The Hungry Puppy app also includes monthly coupons, “Bring Your Pup” rewards ($5 to bring in your dog three times in one month), and access to veterinary and training assistance.
The app was easily customized from a template bought through Como Sense, a customer management and loyalty program provider. Total yearly licensing fees and expenses? Around $700.
“The return on investment is huge,” Frattini says. Over 4,000 customers have downloaded The Hungry Puppy app. Last year, customers redeemed a whopping 97 percent of over $12,000 in Pup Bucks.
2. Make Members Feel Good
Pet$aver Healthy Pet Superstore’s loyalty program at its three New York locations is successful because it makes customers feel good about its rewards. Members can earn 3 percent back on qualifying purchases or donate those points to Pet$aver’s Shelter Feeding Program.
“Customers love the fact they can donate their points,” says Pet$aver CEO Russell Herman.
Pet$aver’s generosity began 10 years ago with its Responsible Owner’s Club, which gives discounts to those who adopt from shelters. Pet$aver also donates $10 to the rescue organization when customers redeem discounts.
Last year, Pet$aver’s customers chipped in over $50,000 in donations to provide food for local shelters through the Shelter Feeding Program. Herman estimates that Pet$aver saw 1,500 new customers in 2016, and 500 became regular customers.
“Both our programs create a sense that we’re a very community-based store,” Herman says. “With national chains moving in, we have to change the way we do business and find a way to increase our customers’ excitement.”
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3. Join a Universal Program
Customers are less likely to sign up for programs at stores they don’t visit often. Universal loyalty programs such as Belly solve that problem. With Belly, consumers don’t have to join yet another retailer’s program, and businesses don’t have to design, implement and maintain their own programs.
Everyone just joins Belly, and the program runs itself.
“The ease of Belly made it a no-brainer,” says Karen Conell, owner of The Bark Market in Delavan, WI where customers have enjoyed using Belly for five years. She says Belly has “without a doubt” resulted in increased customer retention, more purchases and higher profits.
Belly members get a plastic card or download the Belly app to earn points when they shop at any participating Belly store. Points are based on visits rather than quantity or price.
Independent retailers (restaurants, bookstores, salons, etc.) that subscribe to Belly get an iPad to set up at their register that customers interact with by scanning their card or cellphone or entering their email.
Depending on the subscription level, businesses have access to customer demographics and insight into shopping behaviors. They can also email promotions and coupons to their Belly customers.
Convenience is the biggest benefit: It lets people maintain many individual reward programs through one account.
Conell feels the heat from online competition and big-box stores within a few miles of hers.
“It’s vital to show customers you value their patronage,” she says. “Offering this loyalty program, plus our laser focus on customer service, allows us to stand out and be successful and profitable.”
4. Keep It Simple
On the other end of the spectrum, a simple program works beautifully, too. At Maxwell & Molly’s Closet’s two locations in New Jersey, customers who spend $200 earn 5 percent off all purchases for life.
Owner Bonnie Bitondo says it’s her gift to customers for walking in the door. Customers receive a gift bag when they join the Paw Club. The bag contains food and small gifts, but the key to success is the $5 gift certificate attached. “It gets them coming back to us,” Bitondo says.
From there, it’s been easy for hundreds of Bitondo’s customers to meet the $200 requirement to become a Platinum Paw Club member and get the lifetime discount.
“People like simplicity and immediate rewards. They don’t want to wait a year. They want to know they get something every time they walk in the door,” Bitondo says.
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5. Offer a Variety
A drawback with some loyalty programs is the inability to choose how rewards are earned or given. The solution? Build your own program from scratch.
At Especially for Pets’ seven locations in Massachusetts, loyal customers are members of the Companion Rewards Program, which was created exclusively for the business by software developers at M & M Enterprises.
“It is a huge undertaking to develop a custom solution, but it differentiates you from the competition,” says Especially for Pets CEO Michael DiTullio.
Customizing his own program let DiTullio design rewards for every type of shopper. His program currently includes:
- 13th food purchase free
- 10th grooming free
- 3% rewards on supplies
- $10 off training
- 10% senior discount
- 10% discount for one month for people who have adopted a rescue pet
- 10% discount on all purchases for foster pet parents
DiTullio says the program drives purchases. “Customers are less likely to buy food from another store or online because those purchases don’t count toward their free 13th food program.”
With more than 30,000 customers enrolled, the Companion Rewards Program shows how the ability to reward a variety of shopping habits provides value to many different customers.