One of the oldest sales strategies is to reward repeat purchases. An old school example would be your neighborhood coffee shop that had a punch card telling you that after you buy nine lattes you’ll get the 10th for free. A more recent example would be when checking out at Petsmart or Petco (or thousands of other retailers) they will ask for your phone number, pull up your profile, and offer the lowest price possible on every bag of dog food.
If you're thinking of running a loyalty program I've put together some quick tips.
Do not call it a loyalty program.
These programs are not the definition of loyalty. These programs are about bribery. You are paying your customers to be repeat buyers. Treat them as such. Don’t paint a happy picture over it. People are smarter than that.
Instead I would brand the program after the business. Donny's Bike Shop Carbon Club or Donny's Bike Shop Deals.
Make it digital.
Having your customers carry a punch card is silly. Put their purchases in your POS system and track it digitally. When it is time for them to receive their tenth inner tube free, just tell them. Customers will thank you for tracking the little things and will recognize the value of giving you repeat business.
Don’t ignore the data.
The primary value for Petsmart and Petco is not in having a repeat customer, that is a byproduct. The big value is in having thorough data of their customers’ shopping habits. By recording their customers purchases they will have a detailed understanding of what inventory to carry, when people or more likely to buy dog toys, when people are likely to test a new brand of food, and so. No reason why the same data can't work for bike shops.
Consider having the customer buy in.
Rather than discounting for loyalty, Amazon sells loyalty through their Amazon Prime membership. For $79/year (soon t be more) membership gets you access to all sorts of rewards including free or discount shipping, free streaming of movies, and other discounts.
In a bike shop you could sell a quarterly or monthly membership package that gets people buying now for value given later.
What are some loyalty program you run? If you have a moment to comment or share it would great to hear from you. -Donny
Check out the book. Leading Out Retail is a creative look at bicycle retail and teaches retailers simple strategies on how to increase profit through service, what the most important question to ask every customer is, and how to manage the dreaded Timmy Factor.