Loyalty Programs

In this down economy it's tempting to cut prices to compete with other small retailers as well as the big box stores, but this is a losing strategy. Think about it. If fewer people are shopping, and you choose to make a smaller margin on each item you sell, you have automatically reduced your potential profits even before the first customer comes through the door.

Instead of slashing prices, think about creatively rewarding your customers with a loyalty program that rewards them for the behavior that you want to see, as well as the behavior they like to exhibit. Said another way, make them feel special for buying the things they like to buy anyway.

This takes some careful tracking of customer purchases, and you definitely need to build a reliable customer database, but any point of sale system worth its salt will allow you to do this. Instead of pressuring your customers for their personal information, show them a clear benefit to signing up for the loyalty program.

Offer them targeted discounts on your high margin items, rather than cutting prices across the board.

Offer them special bundled promotions that are not available to the general shopping public.

Setup "Loyal Customer Days" or "Special Shopper Previews" and invite your best customers to attend private open houses or shopping days and reward them with a pampered experience. You can include private viewings, samples, and even niceties like food and drink that don't necessarily cost you a lot, but really enhance the shopping experience.

Loyalty programs can be more than just a cash reward or a discount on future purchases. Use your POS data to identify your top customers and make them feel truly special. They'll certainly notice, and they'll tell their friends, directly or indirectly, driving more business to your store.

Check out my profile to the side and visit the CAP website to learn more about POS and targeted loyalty programs.


Will Atkinson has spent his entire career dealing directly with small retailers to solve their technology problems, especially point of sale and inventory control issues. Will manages CAP Software, a specialty POS software company dedicated to providing the finest in retail POS applications for small and medium retailers. Learn more about CAP at www.capretail.com or contact me at will@capretail.com. His expertise extends to customer service issues, usability and workflow properties, and other re...

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