Just the other day a friend was complaining about the pain in carrying large number of loyalty cards in addition to the credit/debit card. Each retailer has a unique card which needs to be presented while billing either for adding of points/ availing discounts. Hence its gets mandatory for a customer to keep the cards in the wallet. The situation of a large number of loyalty card defeats the very purpose of loyalty. It clearly indicates that the customer is not loyal to any retailer instead shops with multiple retailers.
Now is the happening time for retail customers. She/ he is being wooed by the retailers both offline/ online. She gets the best of the discounts, offer, services, loyalty points and the list goes on. All this in the name of loyalty.
The customer gets sugar free for the next 12 months, points added on every purchase which can be redeemed later, additional offers for the loyal customer. Some retailers have gone a step ahead and sold cards with a onetime payment which will enable them to shop for the next few months without actually having to pay cash and the customer get an additional shopping amount on paying cash in advance. An innovative idea to ensure customer shops with the retailer every month. Few banks have also jumped the bandwagon and introduced credit cards in collaboration with the retailers which will ensure loyalty for both the retailer & the bank.
While the cost of getting a new customer is higher than retaining a existing one, do these customers actually remain loyal to the retailers. As per specific sources hardly 10-12% of the customers’ visit a retailer month on month .What is that makes a customer loyal to a retailer? It definitely cannot be offers alone.
Customer service, best prices, good shopping experience, availability of the entire needs at one point does add to loyalty. The single most important factor especially in the Indian context would be TRUST. Trust that I am being sold the best quality products, the trust that I am being charged reasonably, trust that my needs are met etc.
A customer was robbed off his mobile phone by a delivery boy on the pretext of asking for water. The loss of the phone was much higher than saving a few rupees at the new discount website. Thus he went back to his retailer of 40 stores for he trusts him.
A whole office stopped ordering afternoon home cooked food as one afternoon stale food was supplied. Hence the trust was broken. They bought back the old caterer who left the office canteen due to profitability concerns. Hence pricing was worked and he restated his canteen.
While the retailers have worked on many aspects to ensure loyalty the trust factor needs to be really worked upon to ensure loyal customers- the dream of every retailer.