Why does your business need a customer loyalty program?
The competitive retail landscape is growing YoY and new retail technologies are progressing in intelligence, affordability, and availability. With each advancement, it’s becoming more and more crucial for mall operators to drive customer loyalty and find unique ways to set themselves apart from their competitors.
To stand out from the crowd, mall operators must understand what their shoppers want, to successfully meet their needs. Collecting this information can be challenging, so many operators start small by collecting data through wifi forms or even in-store. However, the easiest way to collect key customer data and truly understand unique preferences is by implementing a program that engages with shoppers and tracks their interactions.
68% of consumers would join a customer loyalty program for a brand they like.
Apply this to your entire shopping mall and you start to understand the impact that a loyalty program can have on customer engagement.
In this blog series, we’re going to look at various types of loyalty and seek to share knowledge of why your mall should consider putting a program in place.
First, let’s just clarify what a loyalty program is, and what the benefits of a great loyalty program are.
What is a loyalty program?
In the simplest of terms, a loyalty program is a marketing tactic that a retailer may use to boost customer engagement. There are hundreds of ways to run a program, but many models will function as a paid or free ‘membership’ that promises a customer something in return for their presence and interaction.
The reason that loyalty programs work is because of a basic human psychology trait that says that if we’re nice to someone, they’ll like us.
There are lots of reasons why a customer might gravitate toward your shopping mall or brand in the first place. Perhaps they live locally, engage with mall-wide events or activities, or are long-standing fans of a service or product.
The key to implementing a successful loyalty program is leveraging that relationship and building on it, to create a mutual value proposition. For example, Jessica receives a push notification that LEGO is offering a 30% discount until Friday. She decides to go to the mall, where she spends $60 on the latest LEGO Toy for her son.
As Jessica has made a transaction, she receives an automatic reward, a free coffee token! This way, Jessica is rewarded for her engagement and her purchase, while the store benefits from her sale.
How you construct your individual program is up to you. It will mainly depend on:
- What business KPIs do you need your program to feed into – e.g., data collection, sales uplift, increased physical footfall, a rise in eCommerce orders, etc?
- How you are able to deploy the program – e.g., online, via app, physical touchpoints
- Budget – anything is possible with unlimited funds, but what is feasible with the budget you have? Note: Any mall operator can implement loyalty with little to no budget, just take a look at our blog to help
In future blogs, we’ll look at some of the most common types of programs, how best to incentivize customer participation, implement cutting-edge features and marketing tactics. For now, we’re going to dig deeper into the benefits of implementing a shopping mall loyalty program.
What are the benefits of running a customer loyalty program?
The two biggest benefits of building customer loyalty? Customers who show true loyalty are more likely to spend more money and visit your destination more often.
Other really great side effects of having a loyal fan base:
- Insights into your customers’ habits, (where they shop, how much they spend, how often they visit, their preferences!)
- A ready-made pool of marketable customers that you can directly communicate with
- Repeat customers cost far less than customer acquisition
- Recommendations from brand advocates will aid acquisition at no additional cost to you
- You will most definitely hold the edge over your competitors!
Why should shopping malls run customer loyalty programs?
From the above examples, we can see how a loyalty program can positively impact on the results and this has been tried and tested on individual brands for decades, but how does this work within a shopping mall setting?
Malls aggregate multiple brands that wouldn’t traditionally share data. Mall-operated loyalty programs provide massive opportunities to gather wider-spread insights that can be used to drive customer loyalty and create a much more immersive customer experience.
Shopping mall loyalty programs benefit both the mall operator AND the tenants because they’re central programs that connect every brand within the same location. The outcome for both parties is shared purchase data and insights that foster deeper mall-tenant relationships and enhance customer experience. A win-win, right?
Where shopping mall loyalty programs are in place, often operators see widespread uplift across all financial and engagement metrics, not just for the shopping mall itself, but among individual stores that take part. In fact, most mall-wide programs actually complement existing brand loyalty programs by connecting the shopping experience and streamlining their customer journey.
Increased acquisition and retention
Every business wants to drive customer loyalty and acquire new customers. In a setting where brands are in direct competition with other units in the mall, new customers can be difficult to attract. And when a new customer does walk into a store, you then need to worry about keeping them there and converting their visit into a purchase.
For any size business, utilizing the data from existing customers is an absolute must. Analyze purchase history to understand patterns and trends and encourage direct communication with that existing customer. Remember that having their personal data is a privilege, so plan email or app interactions with care to deliver quality messages that add value to the customer experience.
These closed channels of communication are gold mines for relationship building and driving sales, but ultimately, you can only work with the data you have.
By joining a shopping mall loyalty program, there is a low-cost, low-risk opportunity for brands to gain exposure to new audiences, collect new data points, and boost engagement.
The function of the US shopping mall has changed since its inception back in the 50s. Thanks to dining and entertainment provisions, the 21st-century mall now has the potential to be a ‘destination’ for family and friend days out.
.A loyalty program takes it one step further by providing customers with a rounded experience. The promise of rewards, promotions, and exclusive benefits all make for appealing incentives to a consumer who will ultimately ‘need’ somewhere to shop, eat, and be entertained.
Revenue uplift
In all of our customer case studies, we see an uplift in crucial areas for both mall operators and their individual tenants.
By tapping into and acting upon collected data, loyalty programs repeatedly drive increased spend per customer and a higher average transaction value. Oftentimes, these figures are propelled even higher as programs tend to encourage a rise in general footfall, alongside increased frequency and length of customer visits.
Implementing a loyalty program provides the opportunity to understand how your customers are actually utilizing your mall. If they’re signed up, you’ll be able to track their individual interactions across your site.
The ideal customer will shop, eat, and play during their visit and by understanding each interaction, you’ll easily see whether that is actually happening. You can then act on this insight to either promote (incentivize or reward) the areas where you want to see better performance, target specific customer segments, or identify physical optimizations that will improve usage.
Consistent customer engagement
When a customer signs up for a loyalty program, they are giving you permission to interact with them. Never underestimate the importance of this trust. In return for this consent, make sure that you’re providing something of value.
With the right strategy, your customers will willingly engage with your mall and actively choose to make you their shopping destination of choice. Studies show that loyalty programs succeed when they’re easy to use and understand, and when they offer great discounts.
- Ensure that all of your customer touchpoints are straightforward and consistent across every channel.
- Offer a smooth omnichannel experience that seamlessly links a customer’s online and in-store journey.
- Personalize at every opportunity. If you’re sending emails or push notifications, make sure you’re including offers that reflect your customers’ wants and needs.
