Last Saturday offered an excellent demonstration of the commercial value of a front-end loyalty program compared to the old-style loyalty program.
It was the Saturday before Father’s Day, the busiest day of the Father’s Day season. Plenty of new faces in the shop, plenty of people we might see once or twice a year.
Most shoppers spent enough to qualify to receive a Discount Voucher on their receipt, offering an amount off their next purchase. Plenty of them looked back in the shop for opportunities to spend the reward. This is a key goal of the vouchers, to get infrequent or one time only shoppers to look back into the business for what else they could purchase.
The vouchers are called a front-end loyalty for an important reason – whereas points-based programs have shoppers work toward a reward, discount vouchers dangle the reward that is achievable with one more purchase.
In any retail business seeing infrequent and one time only shoppers, a loyalty offer like discount vouchers is more valuable than a points based program. And today these infrequent and one time only shoppers are important as our businesses change and the customer mix evolves.
People understand money. With all the different points based programs out there understanding the value of points is far more difficult.
But back to last Saturday, the day before Father’s Day. I had one customer who bought a card use their discount voucher for a subsequent purchase valued at more than $50.00, another customer spent their voucher on a two small collectible plush items saying they would be back for more and yet another customer spent their voucher on several birthday cards because they don’t live locally and wanted the saving.
Talking to customers it was easy to see the importance of putting an amount in front of them, an amount they can spent right away. Chatting with one customer they made the point they were over the loyalty cards – they’re all the same. I agree with that sentiment. Points are no differentiator. Cash is. And the extra traffic from Father’s Day is a perfect opportunity to renew the focus on this still fresh approach to loyalty.
I know of several locals who will be back because of the voucher they received for their Father’s Day purchase. That right there is gold as the voucher is the lure, the very practical lure. If the in-store pitch is right and lure works, you can win valuable long term business.
We have other shoppers in the business who purchase magazines from us instead of Coles 20 metres in front of us because of the vouchers. I like that they help us compete against a giant competitor spending millions advertising their points based loyalty program.
Here is my advice on this approach to loyalty.
Start. yes, stop thinking about it and just start. Get some learnings and adjust your setting as you go.
Make sure your employees know how to pitch the voucher. keep it simple. Face the voucher to the customer. Point to the discount amount.
Where you have price control over what you sell, mark-up with the knowledge of the voucher program. Lift prices slightly. The voucher program can cost you nothing.
Don’t promote vouchers except across the counter. Tell all employees the success of vouchers is on them.
I have been involved in developing, watching and learning about shopper loyalty for 30+ years. While my own software offers loyalty points, FlyBys integration and other program integrations, it is the discount voucher option that more small business retailers love.
Now before anyone says this blog post is as ad for my newsagency software company Tower Systems, it is not. I want newsagents to take a modern and more competitive view of loyalty. I note that Tower is not the only newsagency software with discount vouchers.