If executed correctly, customer-loyalty programs can be a valuable part of a pet store's marketing toolbox by inspiring repeat business and even attracting new customers.
Attracting new customers can be a great way to grow a retail pet business, but it is important to remember that keeping current customers can be just as important. In fact, basic business principles teach us that it’s easier to make money with the customers we already have than to hunt out new ones. One of the most popular ways for retailers to market to their existing customer base is through a customer-loyalty program that stimulates repeat business by offering special rewards for repeat business.
A customer-loyalty program offers rewards such as special discounts, free products and events. A customer signs up for the program by providing their email or physical mailing address. A retailer then uses that contact information to market directly to someone who is already interested in the store’s products or services. In exchange, subscribers receive special perks that other customers do not receive. Retailers often provide subscribers with a plastic key chain card with a bar code to identify themselves to store staff or checkout software.
The most popular perk is a discount at the register, but special events and free samples are also common incentives. Some programs keep track of the items each customer buys and offer rewards based on buying history. A pet grooming business might offer a free groom on every tenth visit, for example. There are many subsets of these loyalty programs designed to target different types of subscribers, including relationship marketing, database marketing and reward-based programs. It’s just one part of a robust marketing plan, but it can have a significant impact on a pet store’s bottom line.
Leslie May, founder of Pawsible Marketing, a marketing firm that helps pet businesses build their brands and increase sales, says that customer-loyalty programs are an important part of the marketing mix, especially in the pet market. “As pet lovers increasingly become concerned about the health and safety of what they purchase for their pets, brand loyalty and customer loyalty programs involving continuous and evolving communications are key to keeping customers,” she says.
Customers with Benefits
Just like any other marketing effort a pet retailer uses, the ultimate benefit of an effective customer-loyalty program is increased sales for the brand. “It is much more expensive to acquire new customers than to keep customers, according to a wide variety of market research reports,” May says. “Because of this, it can be very beneficial for increased long-term sales, brand loyalty and referrals.”
But loyalty programs aren’t just about the repeat business, says Kristen Levine, president and founder of Fetching Communications, a Florida-based communications firm that helps pet businesses with marketing. “If the loyalty program is popular and provides customers with unique benefits or savings, customers are more likely to recommend the store to their friends and family,” she says. Remember that word-of-mouth is still the best form of advertising. By keeping their stores’ name in the mouth of existing customers, retailers may reach new a whole new set of customers.
Levine goes on to explain that the effects of loyalty-program marketing can even spread beyond the specific products that are directly being marketed to subscribers. “Another benefit of a great loyalty program is that customers will often begin to plan their visits around the promotions or discount offers, and subsequently may make additional purchases beyond the sale or promotional item they came in for,” she says.
So, in conjunction with in-store advertising like shelf displays and point-of-purchase advertising, an effective loyalty program can boost all sorts of product sales, not just the ones mentioned by name in a store’s email newsletter or monthly mailer.
Signing Up Customers
A loyalty program is only as good as its subscriber base, so getting those signups can make or break a pet store’s efforts. Pet businesses basically have two ways to sign up new subscribers to their programs: in-store or online. Levine warns that each has its own challenges and must be approached individually. For some businesses, one method will be more successful than the other because of the nature of their sales. A mobile grooming company, for example, may entice its subscribers to sign up in different ways than a wholesale pet food retailer that does most of its sales online.
In-store signups are best for customers that a retailer can interact with face to face. They are also more effective when a store has staff members who are offering it to the customers, especially at the register when they have the customers’ undivided attention. “The best way to grow the loyalty program is to personally offer to sign the customer up right at the counter,” Levine says. “The store’s employees would have to be very knowledgeable about the program and possibly incentivized to sign up customers. Leaving a sheet on the counter for customers to sign up themselves might generate marginal gains in membership, but a proactive employee doing the sign up work for the customer will be a more successful route.”
If a pet store has a healthy Internet presence, online signups may be more successful. Remember to have a call to action that directs online visitors to sign up for the loyalty program at key parts of the check out process. Offering an instant discount at checkout can increase signups with impulse buyers, too. Retailers can even offer a way for current subscribers to email invites to friends and family in exchange for a special perk, such as a special edition chew toy or designer pet collar.
With either method, taking time to point out special perks for subscribers can prime customers to sign up at the checkout. Special signage on the shelves or marketing copy in the online store’s product descriptions that highlight the difference in price for loyalty club members and other shoppers can grab the attention of shoppers. Point-of-purchase marketing signage draws attention to special free gifts that are given to subscribers when they make a purchase. Some stores also benefit from special in-store displays or online product categories specifically targeted toward members. Having a section specifically tailored for club members will make current members feel special and nonmembers wonder what they have to do to get in.
Execution is Everything
Once a pet retailer has a nice healthy subscriber list, it’s time to connect with the customers who signed up. May advises pet businesses looking to start loyalty programs to focus on the execution. “Like any other marketing effort, proper and effective execution is the key to customer loyalty programs [with] the end goal of increased sales,” she says. “Understanding the wants and needs of your customer is key to successful implementation and participation. If the program meets those wants and needs, and is implemented properly, the success of the program will increase dramatically.”
The loyalty program landscape is already cluttered. Every major drugstore, grocery store and office supply retailer has a loyalty program in place. Some shoppers have more loyalty-program key chains than actual keys these days. At some point, they all start to blend together, making it impossible to tell the difference between them. If pet retailers are going to ask customers to sign up for another one, they will have to make the benefits of doing so clear, warns Levine. “Retailers need to clearly distinguish the benefits customers receive for signing up for yet another program and the best motivator is generally continual discount offers.”
Regular and consistent contact with subscribers is another factor that goes into making a loyalty program work for a pet store’s brand. Remember that in exchange for the rewards or perks a store is offering to the customer, the retailer gets a hot prospect. Marketing to loyal subscribers is easier if a retailer keeps track of what they’re buying. Mike Campbell, owner of Beverly Hills, Calif.-based Doggie Styles, has experience running a successful subscriber program. “Loyalty programs work best when the retailer has a computerized system to track customer purchases,” he says. Some retailers utilize a regular cash register, and while there are companies that offer program management services, Campbell warns that retailers can lose control of their databases if they do not take a hands-on approach.
While regular contact is important, retailers should avoid too much contact because it can overwhelm subscribers. They may view it as spam, instead of valuable information that the retailer is offering only to members of a special club. This can make subscribers opt out of the program, even if the rewards are substantial. Customers value their privacy, and if it seems like they have to give it up to get a two-for-one coupon on dog shampoo, it will be a hard sell. What constitutes too much contact varies depending on the tolerance of the subscriber list. However, it’s a good idea to start slow and avoid contacting subscribers more than once a month, at first. Over time, retailers can get a good idea what works for their brand’s program.
Levine points out that even if a pet store manages to implement a popular rewards program, it must be maintained to avoid alienating customers. “An independent pet retailer in the Tampa Bay area discontinued an established savings program designed to reward frequent shoppers who purchased dog or cat food in store,” she explains. This caused an uproar among loyal shoppers. “Many customers complained and eventually took their business to larger pet supply retailers nearby that offered loyalty programs. These customers indicated they felt betrayed by the store they had shopped at faithfully for years.”