Types of loyalty program widely used by retail owners
Loyalty programs are widely recognised as essential customer relationship management (CRM) strategies employed by businesses to motivate their most valued customers with points, thereby fostering long-term loyalty and expressing gratitude for their recurring purchases at their establishments. These initiatives serve as effective tools for businesses to not only retain their customer base but also to encourage continued transactions by offering rewards for their loyalty. By utilising loyalty programs, businesses aim to cultivate strong relationships with customers, enhance.
The following loyalty management methods have been widely used by retailers for a long time.
- Customer loyalty
- Item based loyalty
Continue reading the article to learn more about the different types of loyalty.
1. Customer loyalty
It is the most popular loyalty management method and also many retailers use it. If any ERP system supports both types of loyalty, then 96% of retailers will choose to activate customer loyalty for their business.
In this type, new customers or customers who have received a loyalty card are rewarded with loyalty points for each sales transaction. This type is only customer-based, not item-based, which means that customers will be rewarded with points for purchasing any inventory products in a store. Note: Our software allows you to exclude required products from loyalty calculations in product master.
2. Item based loyalty
Retailers rarely use item-based loyalty because it takes longer to set up for the first time in a business. In this case, retailers must configure loyalty items individually, as products in retail stores are typically purchased with varying margins. So, based on the margin, the business owner will configure the loyalty program for each item individually.
The benefit of item based loyalty is you can reduce giving loyalty points for low margin product compared to high margin products.