Clearing the ‘murky waters’ of non-loyalty customers

Loyalty schemes form a critical part of a retailer’s retention programme. After all, a happy customer is a returning customer.

But behind the machinations of loyalty is the data that sits behind the scheme, which gives the retailer the power to deliver personalised communications, offers and promotions, all of which add to the customer experience. Retailers analyse spend, frequency and items purchased to build up a view of what an individual customer looks like across all channels - online, mobile and in-store.

These reward initiatives are popular, widespread in industries from coffee shops and fashion retailers, to bookstores and restaurants. Research suggests that consumers in the UK belong to an average of 3.6 loyalty schemes.

Converting the non-loyalty opportunity

But what about those shoppers that don’t belong to a loyalty scheme, or those that forget to use their reward card or app? Is there value in targeting this segment? Consider the following example; when it comes to supermarkets, 65% of UK adults belong to a loyalty scheme, which means the remaining 35% of the population don’t. This proportion of shoppers presents a significant opportunity to supermarket retailers, which is worth pursuing. However, if it’s the loyalty scheme itself that captures customer data at the point of sale and provides the insight into purchasing behaviour, how can retailers tap into that non-loyalty market?

The power of the POS

Simply put, it’s down to data once again. And it begins at the point of sale, which is still the ideal place to engage with customers, given that the majority of transactions still take place in a physical store. The point of sale has evolved into a brand new marketing channel for retailers, not just from a loyalty perspective, but from a conversional point of view as well. Retailers can gather a wealth of information about each shopper, regardless of whether they belong to a loyalty programme or how frequently they shop with a certain retailer. With the right software, this data can be analysed in the backend and used to shape a non-loyalty customer journey.

Sending customers on a loyalty journey

When a shopper that isn’t a member of a loyalty scheme pays for items at the point of sale, the data from that sale is gathered, analysed and an offer, such as a discount coupon, is generated immediately. When the same customer returns and redeems this offer, the data is tracked, and the same process takes place at the point of sale. This time, more data is gathered about the customer, including their propensity to redeem and another offer is generated based on any number of criteria, including past purchases, or items in the basket.

The offers could take the form of a discount on an item purchased previously, a promotion on a product that’s complementary to a previous purchase, or a stretch spend offer. Regardless of the offer, the journey and shopper are both tracked using the data at the till in real-time to make it relevant to the customer.

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Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.  

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