Customer Loyalty Program - Frequent Shopper Program

An unbiased potential area for implementing and enhancing customer relationship programs today is Retail Industry.

But what kind of programs will all these enthusiatic retailers bring to market?

It is essential to understand the “RIGHT” program for your industry, your retail model and most importantly, your customers’ exclusive preferences.

Any frequent shopper program will allow you to store customer information, offer schemes and discounts and increase marginal sale. But does they potray your retail brand’s message or they add force to your retail expansion?

A loyalty program should be a logical and reasonable extention of your business, rather than a random attachment any service provider could offer.

Most likely, all such programs offers out-of-the-box points and rewards schemes. They are very easy to develop and deploy; but in a longer run they may be expensive, unyielding and worst at reaching the goals. Stand-alone CRM programs often narrows down your scope of expansion and minimizes lifetime customer value.

Such programs, as we’ve said before, may have serious pitfalls for the unwary:

1. Many reward programs treat all customers alike regardless of their potential for incremental business.

2. Those programs that do differentiate among customers with privileged status based on frequency find that frequency doesn’t necessarily correlate with profitability, and may not support the segmentation of customer needs.

3. They can be too expensive to be supported by some retailers’ margins.

4. Customers have a decreasing attention span and declining bandwidth; they already carry too many mileage cards, hotel cards, supermarket club cards and punch cards.

5. And the most serious drawback is that many structured reward programs fail to motivate incremental business, while rewarding purchases that would have been made anyway.

Building a right kind of program provides and extention to the current system and that allows not only points and reward schemes but also provides an integration.

Building a right kind of program will stimulate acquisition and usage. Integrated CRM programs not only provides points and reward schemes but also allows a retailer to make well-informed decisions.

1. It helps a retailer to differentiate a set of repeat customers with that of countless flying customers.

2. It will also build credibility amongst potential buyers.

3. It will help you to analyze their buying trends and thus helps you in choosing right product and services your customers are looking at.

4. It helps you to focus on service excellence and quality.

Retail operates in a tight market, with rivals offering similar value propositions – similar brands and product range including competitive prices.

You have customers. They have to have a great experience with you to become your advocates and a good one to remain customers. But if this value chain isn’t working seamlessly, you’re in danger of losing your customers.


Nilesh Shah Over 10 years of experience in the field of software development, sales and marketing. He has assisted over 500 Retailers and Restaurateurs in implementing the Retail and F&B software with barcode & pos hardware for their business. He holds a designation of Director, Marketing in Rance Computer Pvt Ltd. He holds the certification from Microsoft Corporation and NIS. His current research focuses on developing and implementing intelligent retail systems...

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