Grocery Customer Loyalty: 5 Pro Tips & Tools

Did you know it costs a business almost five times as much to acquire a new customer compared to retaining a current one?

Customer loyalty programs are one of the many useful tools small retailers have to keep existing customers happy and coming back for more. However, having a customer loyalty program and using it effectively are two different things. 

In this post, we’ll cover the benefits of customer loyalty for independent grocers and some expert advice on how to get the most out of your program.

Benefits of a Grocery Customer Loyalty Program

The value of retaining customers can’t be understated. The majority of your revenue (more than 65%) comes from your existing customers. In addition to encouraging repeat business, a well-managed customer loyalty program helps you:

1. Stay competitive with bigger brands
2. Drive upselling
3. Sell slow-moving inventory
4. Gain actionable insights into customer shopping habits

Customer loyalty also benefits your bottom line. One study cited that loyalty members generated 12-18% more revenue than non-members.

What a Loyalty Program Is Not

Loyalty programs are great for keeping your store top of mind with your local customers — but a loyalty program is like dessert, not the main course. According to a recent survey, the average person already has 18 loyalty programs on their mobile device. In other words, customers won’t choose your store because you have a loyalty program.

Customers continue to prioritize a convenient location, superior selection, speedy checkout, and great customer service. 

So, should you still invest in a loyalty program? Yes. Customer loyalty programs are still an expected part of the modern shopping experience and an important way to connect directly with your customers.

How To Set Up a Customer Loyalty Program

Setting up a customer loyalty program is easy. Generally speaking, customer loyalty software comes in two varieties:

• Standalone: This software is built mostly for large organizations that need to scale and automate a unified customer loyalty program across multiple channels.
• Built-in or integrated: Many point of sale (POS) systems come with customer loyalty features built in. However, some providers offer different levels of customization and some only offer customer loyalty as a paid add-on.

For independent grocers, we highly recommend using a customer loyalty program that is integrated directly with your POS system.

5 Tips & Tools To Create a Successful Grocery Customer Loyalty Program

Most retailers (more than 90%) offer some form of customer loyalty program. What can you do to ensure your loyalty program stands out? Here are five tips and tools to use today to manage a successful grocery customer loyalty program: 

1. Understand Your Customers

The numbers are in. Generic discounts aren’t as effective as targeted offers. While personalized offers might seem out of reach for small businesses, that isn’t true. 

Use the reports on your POS system to identify your bestselling items and product types. Then, use that information to create discounts and offers your customers will love.

Take it a step further by using the personal data from your customer loyalty programs to create different shopper segments. 

For example, say you notice a distinct group of shoppers who buy produce and packaged meat and seem to cook their own meals. You could target this segment with discounts on produce, buy one get one (BOGO) offers on select meats, or other unique deals that are more relevant to them. 

2. Take Your Loyalty Program Digital

The more convenient your loyalty program is, the more likely your customers are to use it. Since most retailers offer loyalty programs, giving customers another physical card to scan at checkout isn’t ideal. 

Instead, use your POS system to create a digital loyalty program. This lets customers enter information such as their name, phone number, and email address, which you can use to bring up their account without scanning a card. 

Digital rewards are also easier for store owners and staff to manage. Managers can quickly customize rewards on the store’s POS system, and cashiers will be automatically prompted to offer customers available reward offers. 

3. Market Your Loyalty Program

A loyalty program may offer great value, but it’s up to you to communicate that value to your customers. 

Advertise the benefits of your rewards program on signage near your checkout lanes. Also, post about the value of your customer loyalty program on social media or in your newsletters. 

Instead of using generic language to describe your membership program (e.g., “Earn points with every purchase”), be as specific as possible (e.g., “Earn 10 points for every $5 you spend and redeem 100 points for a 6% discount”).

Related Read: Content Marketing for Small Business: 4 Practical Strategies

4. Train Your Staff

Your staff is invaluable for creating exceptional customer experiences. Since your loyalty program is an extension of the customer experience, your staff must know it inside and out.

Train your staff to know exactly how your loyalty program works, how to sign customers up, and how to check on and redeem rewards. Customize your POS system for quick access to the most-used aspects of your customer loyalty programs.

Don’t expect your staff to remember everything, however. Modern POS systems help by automatically prompting staff with rewards offers, signup prompts, and more. 

5. Use Reward Types Strategically

Rewards programs aren’t one size fits all. The best of the best offer a mix of points, limited-time offers, and member-specific deals to keep customers coming back for more.

Use the various types of rewards together to tailor your rewards programs to your customers. Here are a few examples: 

• Points earned per dollar: Customers earn a select amount of points per dollar spent. This is the easiest form of reward to set up. 
• Points or discount earned per visit: You could offer a set discount based on the number of times a customer visits your store. 
• Member-only discounts: Frequently seen in big chains, offering member-only discounts on certain items is a great way to encourage shoppers to sign up.
• Online discounts: Wave certain fees or offer discounts for members when they shop online.
• Birthday discounts: Offer members free items or discounts on their birthdays. 
• Bonus points: Customers earn bonus points on certain days or particular items. Advertise these bonuses so customers know when to capitalize on the extra points. 

These are just a few of the ways to get creative with your rewards programs. Modern POS systems give you the flexibility to customize your rewards however you see fit.

Simplify Your Grocery Customer Loyalty Program With POS Nation

Once you’ve set up a winning loyalty program, the work doesn’t end there. Make sure you monitor the success of your grocery customer loyalty to understand which promotions worked and which didn’t. This will help you increase your return on investment (ROI) moving forward.

If you’re looking for an easy way to set up a customer loyalty program at your grocery store, look no further. POS Nation comes with built-in customer loyalty tools that are quick to implement and simple to customize to your needs.

Schedule a demo today to see how POS Nation can help your business succeed.