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The Pathway for Retailers to Attain Better Customer Loyalty
Today, loyalty programs have become one of the most powerful arsenals used by global retailers to incentivize consumers, ensure repeat business, and subsequently increase ROI. Recent surveys indicated that over 62 percent of these retailers plan on revamping their loyalty offerings next year, while many others are already battle-ready with offers no shopper can ignore.
However, to have a successful loyalty program in place, it is vital that retailers need to understand customers’ behavior and preferences. A global study across retail and hotels published by Oracle Retail highlighted the fact that many organizations have the wrong idea about the end-users’ likes and dislikes.
For example, 58 percent of the retailers believed that consumers would sign up for every program they offered, but in reality, nearly 70 percent of the end-users limit their participation. This shows that organizations need to first understand the mindset that drives customer loyalty perceptions and then develop engaging programs accordingly.
It is also essential for retailers to understand that there is no one-size-fits-all loyalty solution, and successful loyalty programs are significantly different from one another. The study indicated that a very distinct personality type breeds a unique style of brand loyalty behavior and it identified four specific typologies. The broadcaster who may flit between brands regardless of their experience, the seeker who looks around for the best deal and does not settle for one particular brand, the enthusiast who is a loyal brand follower, and the lazy loyal, the unengaged customer who is loyal just because it’s easy.
When these consumers were surveyed, over 60 percent said that conveniently located stores played a significant role when they went shopping, and 72 percent desired an effortless loyalty program where rewards could be automatically redeemed. Retailers can consider these patterns and understand that customers do not always follow one typology, and analyzing customer behavior is important.
In the coming years, experts predict that loyalty programs will rely heavily on understanding customer behaviors combined with advanced retail technology solutions, helping retailers make better decisions, predict typologies, and deliver accordingly.