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Grocery Loyalty Programs Analysis: 4 Ways Loyalty Programs Help Your Store

If a friend or family member tells you about a great experience at a store, are you more likely to go there and see for yourself?

Creating loyal customers who feel valued by your grocery store is one of the best ways to get more people in the door. There are various ways to accomplish this, but loyalty programs should be near the top of your list.

A loyalty program is an excellent way to reward your customers for repeat business and build an engaged, reliable customer base. Loyalty programs can also collect valuable data about your customers’ shopping habits, which you can use to improve your grocery store marketing tactics and customer service.

In this article, you'll discover the benefits of loyalty programs, how to choose the right one for your store, and how to implement it easily. By the end of this post, you'll be ready to start driving increased customer loyalty and sales.

What Is a Grocery Loyalty Program?

Aside from stocking the best products and having the friendliest staff, how else can you ensure customers keep coming back? Reward them! Loyalty programs are a smart marketing strategy that rewards customers who frequently shop in your store.

Considering 65 percent of a company’s revenue comes from repeat business, and customers spend 57 percent more at stores they’re loyal to, offering a loyalty program is essential to your sales strategy.

There are all kinds of grocery loyalty programs. Some programs give customers bonus points when they buy specific products; others might partner up with businesses, so they can also earn points for non-grocery purchases.

Regardless of the specific details, the main goal of a grocery loyalty program remains the same: to make your customers feel like they're getting more bang for their buck and keep them coming back for more.

4 Benefits of Grocery Loyalty Programs

To help your store succeed, consider implementing a personalized loyalty program. Here’s why.

1. Increase Sales

First, and perhaps most obvious, is the potential to increase sales. You can motivate customers to shop more frequently and spend more at your store by offering rewards. 

For example, you could try a tiered program. 

Customers who spend more get greater rewards as they progress through different levels. You can base levels on the amount spent or how many purchases they make in a given period. The more attractive the rewards, the more motivation customers have to reach the next tier and unlock more significant benefits.

Reaching new tiers will create a sense of accomplishment that engages customers and connects them to your store. You can further increase loyalty by sending personalized messages to congratulate customers on reaching new levels.

Finally, consider limited-time promotions. Seasonal discounts and flash sales create a sense of urgency, and offering loyalty members early access to sales will encourage them to take advantage before it’s too late!

2. Retain Existing Customers

It’s best practice to collect and analyze customer data. With data from your loyalty program, you can create personalized offers and incentives that cater to each customer’s needs and preferences.

For example, if a customer regularly buys specific products, consider sending discount coupons to use the next time they shop with you. Or you could recommend complementary products they might enjoy based on their shopping history.

When your customers feel valued and that you understand their needs and preferences, they’re more likely to stick with you. They might even tell their friends and family about their positive experiences!

3. Collect Valuable Data

A robust point of sale (POS) system helps streamline data collection. From demographics to customer behavior and shopping habits, there’s so much data you can use to inform your loyalty program. 

Demographic information, such as age, gender, and location, helps create customer segments. Digging deeper, you can identify trends and patterns in their shopping behavior. What time do they prefer to shop? What is their average transaction amount? And what do they frequently purchase?

Related: Your Point of Sale Data Is a Goldmine. Here's How To Make the Most of It

POS systems that integrate with loyalty programs can automatically track customer purchases, rewards redemptions, and other relevant data during checkout. It simplifies data collection, eliminates manual entry, and ensures accuracy and consistency.

Furthermore, you can create and maintain detailed customer profiles that include contact information, purchase histories, and rewards program information. With these profiles, you can quickly analyze customer data for marketing and sales purposes, and optimize store operations and inventory management.

4. Improve Marketing Efficacy 

Targeted marketing campaigns that resonate with specific customers are better than trying to reach everybody. Sure, you want a strong social media presence, and you’ll send newsletters to anyone who signs up for them, but with loyalty program data, you can really hone in on your best customers.

For example, say you look at your demographics data and see that customers between 20 and 40 years old spend more on organic goods. You can target customers in this demographic with special offers on organic produce. 

You can get even more granular; perhaps one customer always buys the same organic juice. Send them a coupon with a discount code and a recommendation for another flavor.

You can also use POS data to identify seasonal trends. Do you have customers who consistently spend more around the holidays? Send them a personalized email with a voucher for your seasonal goods.

Monitor redemption rates, average transaction values, and sales attributed to specific promotions with your POS system. Using this information, you can evaluate your marketing efforts and optimize future campaigns based on data.

Types of Loyalty Programs

There are a few different types of loyalty programs you could choose, but go for what’s best for your store. The most common include:

  • Points-based programs: Customers earn points for every purchase they make, and they can redeem those points for rewards, such as discounts and free products. For example, you could offer a point for every dollar spent, and customers can redeem their points once they reach a certain threshold.
  • Tiered programs: Place customers into different tiers based on their spending habits and give them different rewards at each tier. Let’s say you have bronze, silver, and gold tiers; customers progress through the tiers by making more purchases, and as they do, they unlock progressively better rewards. Your POS system should let you automatically track customers’ progress through different levels, ensuring they receive the appropriate rewards.
  • Referral programs: Customers earn rewards when they refer their friends and family to your store. You could offer a $20 credit for every new customer they refer who spends a certain amount.

How To Choose the Right Loyalty Program For Your Store

Before you implement a loyalty program, get to know your customers. What are their shopping preferences? Do you attract a specific demographic? What motivates them to shop in your store? Knowing the answers to these questions gives you a better idea of what kind of rewards they'll find valuable and exciting.

What are your business goals, and how can a loyalty program help you get there? Whether you want to increase sales, focus on customer retention, or expand your customer base, choose a loyalty program that fits your needs.

You could always test your loyalty program on a small segment of your customers. Do they engage? Are they redeeming rewards? Knowing what’s working and what isn’t helps you decide whether to stick or twist. 

Last but not least, your budget is essential, too. Some loyalty programs are relatively inexpensive; others require more investment.

How To Implement a Grocery Store Loyalty Program

Once you've chosen a loyalty program, you must implement it. 

  1. Set your goals: What do you hope to achieve with your loyalty program? 
  2. Choose the correct type of program: There are many loyalty programs, so you'll need to choose one that's right for your business and your customers.
  3. Design your program: This includes creating a rewards catalog, designing a loyalty card, and setting the rules of your program.
  4. Promote your program: Tell your customers about your loyalty program and encourage them to sign up.
  5. Track your results: It's essential to track the results of your loyalty program so you can see how it's performing and make necessary adjustments.

Modern and robust POS systems come with built-in loyalty program features. You want to be able to set up and manage your program from the same system you use for daily transactions. You can then:

  • Collect customer data to help understand your customers
  • Create tailored marketing campaigns and send out personalized offers
  • Make it simple for customers to earn and redeem rewards at checkout
  • Monitor your loyalty program’s success in real time and create reports

Markt POS guide to grocery POS hardware

Launching Your Grocery Loyalty Program the Easy Way

Loyalty programs are a great way to increase customer loyalty and sales at your grocery store. A loyalty program may be the perfect solution if you're looking for a way to boost your bottom line. 

With the increasing competition in the grocery industry, it is crucial to explore strategies that can enhance customer retention and boost profits. A loyalty program is a powerful tool that not only fosters customer loyalty, but also drives repeat purchases and increases customer lifetime value. 

By effectively engaging and rewarding your customers, you can strengthen their connection to your brand and create a sustainable competitive advantage in the market.

Markt POS comes with baked-in customer loyalty software that can be easily integrated with any existing software your grocery has. Schedule a demo today to see how Markt POS can help you implement a loyalty program for your grocery store.

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