During an economic crisis, families’ purchasing power declines, making loyalty programs more relevant in supermarket management. These programs can influence customers to buy in-store, return, motivate purchase, influence product decision-making, and provide satisfaction. For this reason, management must invest in loyalty programs to positively impact sales.
All consumers have used shopping cards, have a frequent buyer card, or are members of a smart shopping club.
These allow us to join a wholesale club, accumulate points to obtain discounts, prizes, or gifts. While supermarkets will enable them to collect customer information, including where we buy, how often, and which products we buy.
This information can be valuable if we know how to use it wisely for greater effectiveness and profitability. Loyalty programs are typically used only for promotions.
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But what are promotions? According to the Association of National Advertisers, promotional marketing includes tactics that incentivize and motivate short-term purchases, influence product testing, or increase quantity to impact sales.
There are two types of promotions: price and sale. The first ones are discount coupons, prizes with monetary value, “extra buck,” or 2×1. While supermarket sale promotions include extra quantities of products in larger packages, contests, games, gifts, raffles, points, or miles redeemable for prizes.
According to Pulse HQ experts, each family has an average of 25 loyalty program subscriptions, totaling $3 billion across the United States. Half of those memberships are inactive, so the challenge is to leverage loyalty programs and creative benefits effectively. To do this, you have to understand that there are several types of loyalty:
- Loyalty by behavior: a connection established by a lifestyle. For example, buyers visit a supermarket because it sells healthy products.
- Functional loyalty: a connection established by the sensory experience of buying in a store, product quality, location, or service.
- Emotional loyalty: a connection established with the brand that generates commitment. An example is going to a supermarket because it offers ethnic or nostalgic products.
- Transactional loyalty: the connection is low because the purchase motivators are prices and promotions. If another supermarket offers better value, they leave.
But to achieve the effectiveness of loyalty programs, you have to know the type of customer, which we can identify by capturing and analyzing data in-store.
This information will allow management to define the incentives, awards, functional or emotional benefits to shield loyalty in the crisis’s face. Services such as belonging to an exclusive wine club, invitations to special events, nutritional advice in supermarkets, discounts in gyms or for health insurance, prizes related to well-being, such as cooking classes, or entertainment, such as “lotteries.”