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Future of Retail — The CFO Issue


issue 04


Understanding the interests and motivations of your customers will help you choose rewards and programme benefi ts that add value and encourage continued participation in the programme.


can also have high value to customers. This might look like exclusive access to products or services, member-only events or extended return times. To encourage repeat purchases, consider a


tiered approach where benefi ts are “unlocked” as customers reach different membership levels based on total spend. And to combat discount-driven shopping


habits, think beyond generic money-off vouchers. Experience-based rewards, like concert tickets, are growing in popularity, particularly among millennial consumers. Understanding the interests and motivations


of your customers will help you choose rewards and programme benefi ts that add value and encourage continued participation in the programme.


3. FOCUS ON THE RIGHT CUSTOMERS Loyal customers are always a good thing. Whether or not they’re big spenders, customers who are positive, connected and enthusiastic about your brand are an asset. But that doesn’t mean you can (or should) invest in them all equally. We’ve already looked at the trouble of


discount-driven customers. Shifting the focus of your programme away from discounts towards value-added rewards should alleviate some of this behaviour. But you’ll always have customers who are just looking for the best deal. Be wary of spending too much time or money retaining these customers. At the same time, don’t limit your defi nition


of “valuable” to those customers who spend large amounts or shop frequently. Brand


advocacy can also contribute to a customer’s value to your business – and those customers who are particularly infl uential on social media will offer the most return. Use the data you have on your customers to


assess which ones are worth extra investment, and ensure they’re getting the most benefi t out of your loyalty programme.


EMOTIONAL LOYALTY = PROFITABLE LOYALTY Placing the focus on emotions over transactions may seem counter-intuitive if your goal is to increase profi ts. But when you build real emotional loyalty with customers, the behaviours that drive profi t – such as repeat purchasing, increasing spend and advocating for the brand – will be easier to encourage. And when you use your rewards programme


effectively to drive such behaviours, customers will be happy to get involved, rather than feeling like they’re being tricked into spending more money. If your current programme is under-


performing (or you haven’t got a programme in place), the next step is to work with the team responsible to assess the overall loyalty strategy, as well as the technology and processes that back it up. Use the tips above to ensure the focus is on building emotional connections with your most valuable customers. It might take a bit more effort than a basic


points-for-discounts scheme, but building a programme around emotional loyalty is more rewarding in the long term – for customers and shareholders alike.


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