With wages, rents and pricing pressure increasing, retailers must be focused on the bottom line like never before. An industry-wide movement to a $15 an hour minimum wage is just one reason why retailers are seeking innovative new ways to compensate for the escalating erosion of profit margins.
At a 4% unemployment rate, even adding or replacing an employee is no longer such a simple option. On top of that, customer service expectations are mounting in the face of intense online competition. Retailers must do more to “own their customers’ attention” to keep them coming back. In this hyper-competitive retail environment, a fresh approach is needed for retailers to “own your customer” without adding expensive headcount, deep discounting or high cost/low return incentive programs.
The 12thMan Solution
In football, the “12thMan” is the extra advantage the home team gains from the influence its fans can have on the outcome of the game, a metaphorical 12thman on the field. In this hyper-competitive retail environment, your “12th Man” is to maximize the use of digital identification and transaction history to raise the service level to your best customers – without the need to increase employee headcount to do it. To have an effective 12th Man strategy, your best customers accurate contact information should be a central part of your marketing database. The net result is owning your best customers’ attention and ensuring frequent store visits and more spending without the need to increase headcount.
Key Success Elements for a 12th Man Solution
- A motivational incentivethat delivers a high sign-up rate for a voluntary “Best Customer” digital identification (contact info).
- Automated processes to simplify consistent implementation (and program parameters that can be self-managed)
- Effective application of the Transaction History Database to personalize the customer experience and customize offers
- Motivational incentive follow-ups
Meeting all these objectives, cash-incentive loyalty programs deliver a stunning 80% success rate for customer enrollment. One reason why is that nearly 60% of respondents said it was too complicated or took too long to earn rewards, and 78% want to redeem their rewards at the point of sale. Further supporting this 12thMan strategy, 87% of customers report they are willing to have details of their purchase activity monitored in order to receive personalized rewards and more relevant offers.
“The days of cards offering 10 points per dollar or a 1% value proposition are over. The future is all about relevance and aligning the program’s value to the customer,” according to Precima President Brian Ross, a leading global retail strategy and analytics company.
Customer Loyalty Accelerator (CLA) was designed to be your ideal 12th Man Solution, meeting all the Key Success Elements while also being easy to implement, cost efficient and delivering a high ROI. More than a basic, points based loyalty plan, it is simple to activate and easily integrates with your existing loyalty plan, or can serve as a standalone rewards program.