Zinrelo recently interviewed Deborah Weinswig, Managing Director of Fung Global Retail & Technology, a retail think tank, and unveiled the secrets for building a successful loyalty program.
Marketers often are in a dilemma while creating a loyalty program for their brands. While their main objective is to ensure their customers love the brands loyalty program, they should also ensure their customers are motivated enough to engage with the program on a continual basis.
Deborah, an award-winning global retail analyst and a specialist in retail innovation and technology shares her thoughts on how retailers can build a loyalty rewards program to maximize customer engagement and outlines the key metrics to measure the success of a customer loyalty program. Read the excerpts from the interview below to find out more.
Q & A Excerpts – Building a Loyalty Program
Zinrelo: What are the key features that retailers desire in a customer loyalty program?
Deborah: As outlined in a recent Fung study looking at loyalty programs, first, they want to provide personalized experiences, and secondly, they want to be able to target more accurately. Both Sephora and Ulta have leveraged the customer data from their loyalty programs to provide personalized experiences for their members across different touch points. Rewards have helped to deliver more targeted and personalized offers across all channels, and initiatives such as equipping store associates with a digital device gives them the ability to track the profiles and preferences of individual customers, as well as to provide more personalized customer interactions.
Zinrelo: Top strategies for retailers to encourage customers to engage with their loyalty program?
Deborah: Here are our top three strategies. First, align the program to the brand positioning. This creates a premium feeling for the higher-spending customer and matches the retailer’s positioning in the higher-end segment. According to Ulta’s 2016 annual report, Ultimate Rewards members contributed 90% of the company’s revenue. As for Sephora, 80% of its transactions were made through the Beauty Insider program.
Secondly, go mobile. As mentioned in another recent Fung study, in the U.S., Walmart has succeeded with its Savings Catcher app by combining price and loyalty factors without requiring customers to visit multiple stores in order to find the best deals. Walmart has also successfully tackled the issue of making it easy to claim points without hassle: customers simply scan their receipt, and if any product is being sold cheaper elsewhere, the system will automatically refund the difference on a gift card.
And thirdly, offer experiences as rewards. Sephora offers free beauty classes to all of its members, and free custom makeovers to higher-tier members. Ulta’s program, on the other hand, focuses more on value purchases. This is delivered by giving members extra points, which is translated into money-off purchases.
Zinrelo: How retailers can measure the success of a customer loyalty program?
Deborah: Some of the key metrics that can be used to measure the success of a loyalty rewards program are; Some of the key metrics that can be used to measure the success of a loyalty rewards program are;
- Engagement rate
- Repeat purchases frequency
- Growth of average ticket size
Free value calculator to estimate the ROI your business can derive from the loyalty rewards program.
More About Our Influencer: Deborah Weinswig
Deborah Weinswig is an award-winning global retail analyst and a specialist in retail innovation and technology. As the Managing Director of Fung Global Retail & Technology, she is responsible for building the team’s research capabilities and providing insights into the disruptive technologies reshaping today’s global retail landscape. She was ranked a top Retail Influencer by Vend for 2017. Prior to joining Fung Global Retail & Technology, she had most recently served as Head of the Global Staples & Consumer Discretionary Team at Citi Research.
Ms. Weinswig has been consistently ranked among the top analysts in her field by publications such as Institutional Investor, where she was ranked #1 for nine years, and by publishers Star Mine and Business Insider, which named her one of Wall Street’s top 36 analysts in 2012. Also in 2012, she received the Researcher Award for Outstanding Service from the International Council of Shopping Centers. She is frequently quoted in The Wall Street Journal, The New York Times and Barron’s, and is a regular guest on CNBC. Before her time at Citi, she held senior research positions at Bear Stearns and Morgan Stanley.