Memberships and Customer Loyalty Programs Grow Customer Lifetime Values
Furniture retail customers gravitate to brands that understand their needs and incentivize their loyalty. Crafting enticing reward and membership programs is a competitive advantage, especially as customers are inundated with choices and retailers compete on overlapping product offerings.
Promoting customer loyalty programs is
critical to sustained retail success.
What is Customer Lifetime Value?
Customer loyalty builds brand affinity and maximizes customer lifetime value (CLV). Customer Lifetime Value (CLV) refers to the net revenue earned throughout a relationship with a customer, encompassing all their purchases over time. CLV serves as a crucial metric for businesses to assess the long-term profitability of their customer base and tailor marketing strategies accordingly. Retailers’ loyalty, reward, and membership programs grow Customer Lifetime Value (CLV) by encouraging repeat purchases and increasing customer retention.
Furniture retailers can elevate their bottom line by deploying customer loyalty programs, reward programs, and membership programs in an ideal combination for their businesses.
The Differences Between Loyalty Programs,
Reward Programs, and Membership Programs
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Customer Loyalty Programs
Customer loyalty programs incentivize customers for their ongoing patronage. Loyalty programs do not have a cost for participation and aim to inspire repeat sales. This makes loyalty programs an ideal place to start for retailers embarking on their customer engagement strategy. Most retailers require contact information such as an email address or phone number, which builds a retailer’s marketable database. Customers are enticed with benefits such as promotion codes or private sale invitations, encouraging customers to engage in subsequent purchases.
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Reward Program Incentives
Reward point systems are a method to incentivize customers employed in both loyalty and membership programs. Mid-sized and enterprise-level retailers can begin exploring this option as an evolution of their loyalty strategy. In a Rewards Program, points are accrued based on the monetary value a customer spends with a retailer. Retailers define their program guidelines, such as how many points are earned for each dollar spent and how many reward dollars the customer earns back based on point thresholds. It is essential to have precise accounting to track reward liabilities.
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Membership Programs and Subscription Plans
Due to the saturation of traditional loyalty programs, retailers are evolving towards membership programs and expanding incentives beyond transactional benefits. Membership programs aim to cultivate brand allegiance. While traditionally associated with industries like streaming services or meal delivery kits, subscription models are gaining traction in retail, including furniture stores. Membership programs require customers to pay to join, creating exclusivity. Some retailers prefer a one-time enrollment fee, while others seek the reoccurring revenue from annual subscriptions.
Incentivizing Customers to Become Members with Creative Programs
Psychology is at play behind membership programs. Customers seek to maximize the value of programs they pay to join, making the long-term value of membership attractive to retailers. Enticing customers to join a paid membership program is critical. Companies can stand out in a crowded marketplace and retain loyal customers by offering unique incentives and rewards. It’s all about presenting customers with the VIP benefits they desire. Here are some program ideas that furniture and appliance shoppers value:
- Member-only pricing or promotional codes.
- Access to member-only financing plans with attractive terms and interest rates.
- Premium delivery services or free delivery with no minimum requirements.
- Extensions of protection plans for more robust coverage on big-ticket purchases.
- Curated shopping appointments or professional design services.
- Early or exclusive access to seasonal sales and private events.
- Invitations to private social events such as design workshops or designer meet-and-greets.
POS Software in Loyalty Program Management
Point of Sale (POS) software plays a pivotal role in ensuring the success of loyalty, reward, and membership programs for furniture retailers.
Here are just some examples of how:
- A POS system facilitates accurate tracking of reward points accrued with each transaction and ensures the reliability of redemption.
- POS software aids in accounting for liabilities associated with outstanding reward balances, providing retailers with insights into their financial obligations.
- POS systems preserve margins by enabling retailers to set rules and restrictions and ensure customers have the appropriate membership to utilize promotional offers.
- For retailers with subscription memberships, POS software will track plan expiration and require a reoccurring subscription payment to be processed to continue program benefits.
- Finally, POS software ensures consistent program execution by automating incentive issuance and redemption processes wherever customers shop with your brand.
Additionally, retailers can leverage data collection and insights from loyalty and membership programs within a POS system to understand customers better. These programs enable businesses to gather valuable data about their customers’ preferences, behaviors, and purchasing patterns. This data can be used to tailor marketing strategies, personalize offers, and improve overall customer experience.
The Power of Loyal Customers
Loyal customers are more likely to advocate for a brand, leading to word-of-mouth and social media referrals, organically contributing to new customer acquisition. Loyalty programs can incentivize referrals through bonus points or rewards for successful referrals, amplifying the reach of the business through word-of-mouth marketing.
Modern Customer Loyalty
Customer retention is paramount for retail furniture stores seeking to thrive in an increasingly competitive marketplace. Well-designed loyalty and membership programs can differentiate a business from its competitors and attract customers who value the benefits and rewards offered. Retailers can cultivate brand advocates by exceeding customer expectations through attractive retention strategies.
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