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Tips for Using a Customer Loyalty Program Well

You may have hundreds of customers enrolled in your store’s loyalty program, and those shoppers might religiously use their rewards cards at your business. But are you maximizing the ways a customer loyalty program can benefit your operation?

Loyalty programs reinforce your store’s relationship with customers, but they also provide valuable customer information. That data, if used well, could give your home improvement store a competitive edge in your market, where you likely compete with businesses ranging from small independent stores and big boxes to Amazon.com.

“To win the battle for long-term loyalty while consistently engaging consumers, retail organizations must plan an effective strategy supported with data, analytics, customer segmentation and targeting,” according to DataCandy, a company that provides loyalty and gift card programs to retailers.

Here are tips from DataCandy on how to use a loyalty program successfully:

1. Define your brand’s most loyal customer base by analyzing data collected through the program, and work to engage those shoppers with your marketing and promotions efforts.

2. Use data collected through the program to create customer segments based on purchase patterns, demographics and other differentiators. Look at how often shoppers visit your store and how much they spend. Then customize your promotions for each segment.

3. Set goals and strategies for reaching each segment. For example, find ways to reward your most loyal customers. Offer special discounts just for them or come up with creative rewards, such as free project supplies for an in-store workshop or exclusive access to an event.

4. Track standard metrics, such as the percentage of sales that come from loyalty program members or the percentage of transactions for which a loyalty card was swiped. This information can help you decide if your loyalty program is working.

5. If you don’t have a loyalty program yet, don’t start one without first coming up with a carefully thought out plan. Your program will be more successful if you start with a strong strategy for using it to market your business.

About Kate Klein

Kate is profiles editor for Hardware Retailing magazine. She reports on news and industry events and writes about retailers' unique contributions to the independent home improvement sector. She graduated from Cedarville University in her home state of Ohio, where she earned a bachelor's degree in English and minored in creative writing. She loves being an aunt, teaching writing to kids, running, reading, farm living and, as Walt Whitman says, traveling the open road, “healthy, free, the world before me.”

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