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Is A Loyalty Program Really For You?

Customer Loyalty Program

Today, it seems that every time you walk into a retail store you are being asked to join their loyalty program.  Arguably, consumers are feeling loyalty fatigue and are questioning whether the rewards are worth it, or perhaps even asking if they will ever earn anything of real value. Retailers looking to start a loyalty program should first think about whether they have used every tool at their disposal to build loyalty.  This is a “getting back to basics” approach.

Let’s examine some examples of retailers who have fostered and nurtured customer loyalty outside of the confines of a loyalty program.

Renowned Customer Service

Ask any American consumer which retailer has outstanding customer service and undoubtedly, Nordstrom will be top of mind.  Employees are not only trained to provide excellent service, but are also urged to use their better judgment to immediately address customer concerns instead of waiting for the go-ahead from a more senior staff member.  This philosophy has allowed Nordstrom to pamper customers and provide fodder for stories such as the man who returned his tires in the store. Nordstrom’s legendary service brings customers back again and again because there is such little risk in buying something at the store, which, given its higher-ticket product assortment, is a big win.

Offer Exclusive Products

In Canada, Loblaw Companies developed the hugely successful line of unique President’s Choice products.  These products were extremely popular and in demand by consumers—so much so that someone unfamiliar with the brand would be hard pressed to guess that it was not a leading national brand.  Loblaws’ key to success, of course, was to limit their excellently branded products to their own stores. Customers had to shop exclusively at Loblaws to get these products.

Your Gift Cards Can Build Loyalty

Think of gift cards as another private label product that you can use as a promotional tool.  They drive traffic back into your stores and with the right campaign messaging, you can incentivize the behaviour you want from customers.  Rewarding customers who are already shopping in your stores with a gift card gives you another opportunity to sell, engage and retain when they redeem.  Limited edition and promotional gift cards can also be used as loyalty tools.

Building a Like-Minded Community

If you’re a passionate runner, you know that not any shoe will do.  And you also consider running a lifestyle, not a sport.  That’s why “real” runners don’t shop at a general sporting goods store.  The Running Room has built its success on a niche expertise. The retailer supports its customers’ lifestyle with running clinics and events. Their store associates are avid runners that are clearly qualified to provide service and commentary, and each store creates a community of runners that is like a family.

Customer Convenience

Starbucks customers can’t get enough of Starbucks, and usually, they can’t get it fast enough. Their frequency of visits makes Starbucks’ mobile payment app a convenience tool that seals the relationship.  There is no reason to go anywhere else when you have an app that doesn’t require you to count change or fumble for bills every single morning (and probably afternoon, too).  With mobile payments now representing 30% of total US payments, Starbucks’ mobile payment app opens up a new window in servicing more customers faster: a definite win-win.

Before you move too fast on developing a loyalty program, make sure you are leveraging everything in your existing toolbox to create loyalty among your customers.  If you don’t have these right, chances are a loyalty program isn’t going to get you any further ahead.


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