Loyalty scheme for independent retailer

[Taverner]

Hi there

We run an independent local retail store and during the pandemic (and currently) we offered a 5% discount for Blue Light Card holders which has proven quite popular.

We have thought about introducing a loyalty scheme that extends a similar discount to customers who do not have the card.

Although we have a scheme in our epos system, the one we've looked at is a very simple index card based one called the 6-box loyalty scheme where you record six separate customer purchases, total the spend amount then offer 5% of that amount as the reward.

Our only concern is that times are tough as it is and our turnover is down on the previous year so is it a good time to introduce such a scheme?

TIA

 

[Paul Kelly ICHYB]

Our only concern is that times are tough as it is and our turnover is down on the previous year so is it a good time to introduce such a scheme?

Are you worried you will give away margin or increase sales?

 

[Taverner]

Are you worried you will give away margin or increase sales?

I suppose the former until a scheme has been running long enough to show an increase in sales.

Maybe of we had a trial period to begin with.

 

[Paul Kelly ICHYB]

If you are going to do it, dive in head first, but get a proper scheme - you will get little value from cards you stamp, as the people that will use it will tend to be regulars.

Use a system where you offer good value and collect contact details - this can open up so many enhanced opportunities to market yourself.

WHat sort of business do you have?

 

[IanSuth]

how about something like this where a few local retailers club together and effectively cross sell the use of each other to your customers by a joint loyalty card

Traders launch loyalty card in bid to increase custom

BUSINESSES in Benson are trying to encourage more trade with the launch of a customer loyalty

www.henleystandard.co.uk

 

[Taverner]

If you are going to do it, dive in head first, but get a proper scheme - you will get little value from cards you stamp, as the people that will use it will tend to be regulars.

Use a system where you offer good value and collect contact details - this can open up so many enhanced opportunities to market yourself.

WHat sort of business do you have?

We have a pet supplies shop. I think that was one of our thoughts, that the regular customers will be the main take up for a loyalty scheme.

Maybe we should concentrate more on upselling.

 

[Taverner]

how about something like this where a few local retailers club together and effectively cross sell the use of each other to your customers by a joint loyalty card

I'll have a look into that, thanks.

 

[Annoying Donkey]

how about something like this where a few local retailers club together and effectively cross sell the use of each other to your customers by a joint loyalty card

Better to make offers to non competing business within your own niche. For pet supplies, maybe Vets, Dog Training, Pet groomers... The more targeted you are, the better the results...

 

[BusterBloodvessel]

The question to ask is why is turnover down? Are people spending less on treats due to financial issues - in which case is a 5% reward going to make enough difference? Are people rehoming their pets or not getting new ones as they die? Is your turnover "artificially" down i.e. did you enjoy a lockdown boom when everyone went out buying dogs?

If it's any of the above, I'd say it's not likely to make a difference. However have you got competition locally and are you losing business to them? If so, is it due to price or some other reason? Whatever the reason(s), is a 5% reward going to change them?

For what it's worth I get my dogs food from Jollyes, and they have a loyalty scheme where you get 10% (I think) off one purchase of food each month - the deal is you have to buy in one month to get the discount the next, and so on. But to be honest, it's of little odds to me and doesn't make me go there over somewhere else. I go because it's local to my house, the discount is just a bonus. It's a couple of quid a month. Earlier this week I was on a retail park with a different pet store and I just nipped in there because I remembered I needed food - I didn't think "no wait, I'll take a detour to my normal place on the way home and save £3"

Others may be different, especially big hungry dogs (compared to my 4kg Dachshund!) but I'm just not sure people will be spending regularly enough or with enough value in a pet store to make it enticing. You may end up just giving away margin for the sake of it (which I suspect the Blue Light discount is - it might be "popular" in terms of the amount of times its used, but are people coming specifically because of that?)

 

[Taverner]

The question to ask is why is turnover down? Are people spending less on treats due to financial issues - in which case is a 5% reward going to make enough difference? Are people rehoming their pets or not getting new ones as they die? Is your turnover "artificially" down i.e. did you enjoy a lockdown boom when everyone went out buying dogs?

If it's any of the above, I'd say it's not likely to make a difference. However have you got competition locally and are you losing business to them? If so, is it due to price or some other reason? Whatever the reason(s), is a 5% reward going to change them?

For what it's worth I get my dogs food from Jollyes, and they have a loyalty scheme where you get 10% (I think) off one purchase of food each month - the deal is you have to buy in one month to get the discount the next, and so on. But to be honest, it's of little odds to me and doesn't make me go there over somewhere else. I go because it's local to my house, the discount is just a bonus. It's a couple of quid a month. Earlier this week I was on a retail park with a different pet store and I just nipped in there because I remembered I needed food - I didn't think "no wait, I'll take a detour to my normal place on the way home and save £3"

Others may be different, especially big hungry dogs (compared to my 4kg Dachshund!) but I'm just not sure people will be spending regularly enough or with enough value in a pet store to make it enticing. You may end up just giving away margin for the sake of it (which I suspect the Blue Light discount is - it might be "popular" in terms of the amount of times its used, but are people coming specifically because of that?)

Some excellent points there, some of which have crossed my mind before.

With regard to turnover being down, I can only put it down to people not having as much to spend. We never had a lockdown 'boom' despite being able to open all the way through it so we can't blame that. We don't stock any grocery brands and go for the best quality foods and treats across the budget range. Our premium ranges are still selling well.

I think the Blue Light Card works for us because we do have quite a number of healthcare and related services customers who do come to us regularly because of it.

I think we've decided that a loyalty scheme whether basic or otherwise is not for us at present, but we appreciate the feedback.