Think about how you feel when you get that last punch on a punch card for a free sandwich. Or how it feels to earn enough points to get 20% off your order at your favorite store.
Chances are, your customers feel the same way!
Rewarding customers for shopping in your grocery store is a surefire way to keep them coming back for more. Plus, the benefits of building a loyal customer base shouldn’t be overlooked: increased profits, regular patronage, free word-of-mouth marketing, and more.
Creating a grocery loyalty program is the best way to reward your customers and boost your brand’s reputation. In this blog, we’ll share three grocery loyalty program examples to inspire you, explain how to implement a program, and show you how a grocery point of sale (POS) system can make the process easier.
What Is A Customer Loyalty Program and What Are the Benefits?
A customer loyalty program is a marketing initiative designed to encourage repeat business by offering rewards, discounts, or special perks to frequent customers.
These programs can exist as point systems, tiered memberships, or punch cards. You can use them to encourage repeat shopping and help customers enjoy shopping in your store.
There are various benefits to offering a robust customer loyalty program, including:
🤝 Customer Loyalty: It’s in the name, after all! Loyalty programs encourage customers to return to your store rather than shopping elsewhere.
😍 Brand Loyalty: A good loyalty program strengthens the emotional connection customers have with your brand. They’re more likely to shop with you and share their love of your brand with others.
📊 Data Collection: The data you collect will provide valuable insights into customer preferences and purchasing habits.
🕰️ Customer Retention: Similar to customer loyalty, a good program Increases the likelihood that customers will remain loyal for the long haul.
👀 Attract New Customers: When word spreads about how great your loyalty program is, it will act as an incentive for new customers to choose your grocery store.
🥊 Beat Competitors: The way you reward customers for shopping sets you apart from competitors.
💰Boost Profits: The more customers come back, the more money your store earns.
And don’t forget about free marketing! As your repeat shoppers share the perks of your loyalty program, you’ll start to see new faces frequenting your aisles, and your loyalty base (and revenue!) will grow.
Curious about how a grocery loyalty program could work for your store? Schedule a demo to explore how our solutions can help you build a thriving customer base.
How To Create a Customer Loyalty Program
As you piece together the elements of your customer loyalty program, be sure to do your research. Look into successful grocery loyalty programs to understand what works and try to spot common elements such as reward types, engagement strategies, and tier structures.
How do you want your reward system to work? You could choose to include different reward tiers or varied types of rewards to cater to different customer preferences.
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Last, tailor your loyalty program to fit the characteristics and needs of your target customer base, considering factors like age, location, income, and shopping habits. Making your rewards unattainable for most will have the opposite effect.
Customer Loyalty Examples for Grocery Stores
Here are a few examples of customer loyalty programs that use different reward systems.
- VIP clubs: Beauty giant Sephora is famous for its VIP club. It comes in three tiers: Beauty Insider, VIB, and Rouge. The more money customers spend, the higher they’re placed in the tiers. Each tier comes with better rewards and offers.
- Punch cards: A classic loyalty program, the punch card is an easy, tangible way for customers to earn a reward. Sandwich shops use this to help customers earn free sandwiches. Dairy Queen uses it to help customers earn a free Blizzard (locations may vary).
- Birthday perks: Everyone loves a gift on their birthday. Starbucks uses birthdays to offer a free snack, while other retailers offer coupons.
- First-time purchase discounts: Attract new customers with a first-time purchase discount when they sign up for your loyalty program. For example, when people join World of Hyatt’s hotel loyalty program, they instantly earn 10% discounts.
- Refer a friend discount: Word-of-mouth marketing is a powerful way to reach more customers. Many retailers, like The North Face, offer a refer-a-friend discount of 10% or more when program members send a special code to friends.
Whether you want to start or revamp your program, here are some examples of grocery customer loyalty programs that will inspire you.
Related read: How To Attract Customers to Your Store — 6 Ideas That Really Work
Loyalty Program Example 1: Kroger
Kroger’s loyalty program, Kroger Plus, offers members fuel points and exclusive, personalized discounts. Shoppers earn points for every dollar spent, which they can redeem for fuel discounts or rewards cash. The grocer claims customers save over $1,000 annually on average using Kroger Plus.
Kroger has seen a significant increase in customer retention and frequency of visits and even implemented Kroger Boost, a paid loyalty program that provides additional benefits like 2x fuel points and free grocery delivery.
Related Read: 11 Key Performance Indicators Grocery Stores Should Track
What makes it effective: Kroger Plus makes shopping easy for customers. Registering your account on the app gives you access to shop, manage your grocery list, view your receipts, and check your Fuel Points. Shoppers also get early access to the weekly ad. Offering discounts on fuel during a time when gas prices are soaring is sure to get more people in the door.
Inspiration for small grocers: Focus on simpler rewards and use local partnerships to create similar value. Start with a simple points system, like one point for every dollar spent or five points for every $10 spent, and determine rewards. Smaller grocers aren’t likely to be affiliated with a gas station, but you could offer deeper discounts on purchases over a certain amount.
Loyalty Program Example 2: Safeway
Safeway’s point-based loyalty program, Safeway for U, also offers personalized discounts and rewards.
Members receive exclusive deals, discounts on select items, and digital coupons. Customers earn points, which can be redeemed or converted into cash-off savings. They get one point for every dollar spent and two points for every dollar spent on gift cards. The grocer also promotes point multiplier events. Safeway also offers fuel discounts at their pump with $1 off, or 20 cents off per gallon at participating gas stations.
What makes it effective: Personalized offers based on purchase history drive higher engagement. Plus, customers can shop, find recipes, and use digital coupons on the app. Members also enjoy a birthday treat, a free item every month, and discounts on pet medications and supplies.
Inspiration for small grocers: Use digital coupons and personalized discounts to attract and retain customers. If you don’t have the bandwidth to start and maintain an app, start by collecting customer emails and sending them weekly discounts and coupons.
Loyalty Program Example 3: Meijer
Meijer’s mPerks rewards program offers purchase points that can be claimed for different rewards. Members earn 10 points per dollar spent, which can be tracked in Meijer’s app. Customers can also view their savings along the way and redeem points for rewards like money off purchases, fuel rewards, free products, and free grocery delivery.
Something that sets this program apart from the others on this list is integration with charities. Rather than claiming rewards, customers can select local schools or organizations to support through their purchases.
What makes it effective: Like the other examples, the app makes it easy for customers to shop online, redeem points, and find discounted items. The fact that customers can support local organizations is a huge perk.
Inspiration for small grocers: Consider partnering with a local food bank or children’s charity and give customers the option to donate a certain percentage of sales. They can also redeem points for dollars toward local charities.
Best Practices for Implementing a Grocery Loyalty Program
There are four basic steps to creating and maintaining a loyalty program for grocery stores.
- Understand customer preferences: Gather data on what your customers value most in a loyalty program to tailor your offerings. Take a poll at the registers or ask customers to fill out a brief survey.
- Leverage data analytics: Once your program is running, use insights from customer data to refine your rewards and engagement strategies. Look at how many rewards are being claimed and how many are left on the table.
- Personalize rewards: Create personalized experiences and offers based on customer behavior and preferences. These offers make customers feel seen and valued.
- Communicate effectively: Ensure customers know about the program and its benefits through various channels. Place a small blurb in your advert, set up a designated webpage, provide QR codes that lead to the webpage, and educate your staff.
Using these best practices, you can implement an effective loyalty program in your store.
Related read: 8 Practical Marketing Ideas for Small Grocery Stores
Customer Loyalty Programs and Your POS
Large grocery chains have an army of people to help with designing, creating, and maintaining an app. The good news is you don’t have to be a major grocery chain to run a successful customer loyalty program.
Many modern point of sale (POS) systems have a built-in customer loyalty program, so you don’t have to worry about manually tracking data. POS Nation’s system can help you establish and nurture an engaged customer base and keep them coming back for more.
Here’s how it works: When customers come to a checkout terminal, they have the option to enter their phone number to sign up for the program.
Every time they enter their phone number, their data is tracked in the POS. While a phone number is the only information required, you can also collect email addresses. Obtaining contact information is essential for future marketing campaigns, and consistent communication with loyal customers is essential.
Related read: Why Is Grocery Inventory Management So Important? [+ 3 Best Tools]
Take the Guesswork out of Customer Loyalty With POS Nation
Having a loyal customer base means you’re providing a service your customers appreciate, and they’re happy to spread the word! Implementing a customer loyalty program is a powerful way to build that loyal customer base, increase your store’s profitability, and stand out from competitors.
We provided examples of how big grocery chains are doing it and offered solutions smaller grocers can mimic. The best way to get it done is with a customer loyalty program built into your POS. With a system like POS Nation, you can not only track customer data, but also manage inventory, create and accept coupons, reduce shrinkage, and more.
If you’re ready to create or redesign your customer loyalty program, schedule a demo today to see how POS Nation makes it easy and effective.
