If you’re in the retail or restaurant business in Kenya and you’re not paying close attention to loyalty programs, you should be. It’s hard these days not to – they’re everywhere. For example, it was no surprise that 68% of Kenyans are members of at least 1 loyalty program. The average Kenyan is a member of 2 programs and the average Kenyan household is a member of several programs.
It’s amazing that retailers and restaurants in Kenya are not doing loyalty programs, much to their own detriment. Loyalty increases the frequency of existing customers and improves retention of new customers. Running an advert or posting a offers is much more expensive than marketing to your existing customers, and this has been mathematically proven over and over again. Unless you are deliberately trying to attract new customers so that you can capture them in your loyalty program, save your money and invest it in your own loyalty offering.
Whatever promotion you offer, it should be intended to do four things:
- Drive more customers into your business
- Increase profits and revenue
- Increase stock rotation and preferably slow moving higher margin stock
- And provide you with customer data to remarket or analyze down the road.
Here’s a few things that might help you to customize your own loyalty program for your retail store or restaurant.
If you’re in the retail or restaurant business in Kenya and you’re not paying close attention to loyalty programs, you should be
Look Before You Leap
Consider your point of sale system in Kenya and include your service provider in the discussion. I have seen retail store and restaurant owners have meetings and print marketing materials and send out SMS blasts only to find out that the loyalty program they have dreamed up isn’t possible with the POS system they currently own. This usually leads to self-inflicted strained relations with their POS system provider in Kenya and is completely avoidable by simply doing some homework first.
Whatever you plan to do, it must be compatible with your POS system, as the POS system is absolutely critical in the tracking of whatever program you launch. If your POS system doesn’t have a points or loyalty program, or there is no compromise available between what you want to run vs. what is available in your system – you need to change POS systems.
If you’re a new business owner and you haven’t selected your POS system yet, you should consider PawaPOS for retail businesses. The PawaPOS system we offer have loyalty programs that are very detailed and easy to use.
What’s In A Name?
It must have a catchy name. I know. It’s cosmetic, and that’s unlike me, but it really matters what you call it. Remember, if you market the loyalty program effectively to your customers you’ll eventually have thousands of members and the program will be around for decades. You really need something that your store can be proud of and your customers can easily remember so they can pass on to other customers by word of mouth.
It Must Be Well Planned
They call them loyalty plans for a reason – they’re planned. Once you have a great loyalty program name, you need to carefully organize the details of the program. You can’t do this haphazardly. If you need some professional paid help with this, get it, and I can’t stress this enough. You need a program brochure outlining the details of the plan so that your staff can easily educate themselves and hand out to customers asking questions about the program.
You need a sign up form asking for the customers information so that your staff doesn’t unnecessarily tie up POS terminals with data entry. You need a customer card or key-tag so that customers can be easily recalled at the POS and their purchases and redemptions can be tracked with ease.
You need to determine the percentage return on your loyalty plan and how your customers will realize that reward.
Keep It Simple Stupid
Remember who will sell this program – your staff. Make it too complicated and they won’t even try. Even if you sell the loyalty program yourself, remember who you want to join the program – your customer. Make it too complicated and they won’t try either. You should also actively try to avoid program contradictions with other marketing initiatives.
It’s not a good program if it causes you to get into arguments with your customers over whether or not you’ll include one thing or another in your loyalty program in Kenya. Make the reward calculation simple – it should be a points or percentage return based on purchases, and your POS system should track it automatically. Beware of anything you have to mail, count, track, or redeem manually – it is unlikely that any plan you create that has an intense labour requirement on the part of you or your staff will be successful.
Any promise you make that is not fulfilled is worse than making no promise at all. In other words, if you promise a customer you will mail him a gift certificate if his purchases reach a certain level and you fail to follow through because it’s too much work or you don’t have time to do it, your loyalty program will be contrary to your goals.
Make the reward calculation simple – it should be a points or percentage return based on purchases, and your POS system should track it automatically.
Quid Pro Quo
Don’t be afraid to ask for some information in return for a decent loyalty program and make sure your staff are trained on how to ask for it politely. Ask for their name, address, telephone number, cell phone number. Also ask for their birthday and anniversary if appropriate. The information that you gather when people join will be invaluable for tracking sales preferences, remarketing to your client base, keeping your customers informed about new products and services, and monitoring for fraudulent use of the program.
Make sure your sign up form has a question about receiving a newsletter or information from your company. Make sure your brochure has a sincere statement about privacy that you intend to follow and be honest about how you intend to use their information.
Make Your Loyalty Program Worthwhile
Customers are better informed today than ever before. Using Google, they can easily look up other competing loyalty programs in Kenya online and determine which ones are the best , and they will not be easily fooled by a loyalty points scheme that promises much and delivers little. On the other hand you don’t need to give away the store either.
Naivas Supermarket loyalty program gives back Ksh 1 for every Ksh 100 spent – that’s 1%. Kenya’s most famous program – Safaricom Bonga Points – also gives back 1 Shilling for every Ksh 100 spent, which works out to a 1%. It doesn’t seem like much until you consider how many programs boost their programs for customers by offering double and triple points to encourage customers to buy slow moving but higher margin products. A triple points item on Naivas pays the customer at a rate of 3%.
It’s An Investment
If you take nothing else away from this article, remember this:
You are investing in your customer. This is not the same as a cost. Investments pay a return on your money and you can measure it. One of the most common mistakes that I see when people set up their customer loyalty program is the assumption that they will lose money on their regular customers – there is a fallacy that says “they would buy anyway”. Unless your store is in a prison and your customers are prisoners, this is an incredibly foolish assumption.
Even if you’re the only game in town your customers still have lots of options. They can make their purchases online; they can go one or two towns over. Worse yet, they can decide to stay home. There’s a difference between liking your brand and being loyal to your brand. Customers that like your brand buy from you. Customers that are loyal to your brand recommend you to others and buy from you.
Two more things to consider – the relative cost vs. the relative redemption. At a rate of 1%, in order for your customer to get Ksh 1,000.00 worth of value they have to spend Ksh 100,000! And let’s compare this to other promotions you may have run in the past. For example, a restaurant might offer a two for one coupon. That’s a discount of 50% plus the advertising cost of running the coupon in the magazine or newspaper!
By investing in a loyalty program you take your advertising money, give them directly to your customer, and then they take those advertising money and spend them in your store. By running the program yourself you eliminate the middleman and can offer more value to your customer for the same or less money.
Sell! Sell! Sell!
Your goal should be that 100% of your customers become a member of your loyalty program – period.
To do this you need to sell the heck out of it and to do that you need to get your team on board. There shouldn’t be a single customer that comes to your cash register that doesn’t get asked at least once if you are a member and would like to join. When new customer boarding on the program begins to lag, offer an incentive plan to your service staff to board customers on the plan. Pay them something for every customer that joins during their shift.
Your customers will have questions, so you should have a simple brochure that explains the loyalty program in detail and has a FAQ (Frequently Asked Questions) list. Your staff should be well acquainted with the details in case they are asked a question.
You must be dedicated to the long term success of the plan. You can’t run it for a week and complain that the program isn’t working. You have to use it as a long term strategy for increased sales and ultimately increased profits.
Your goal should be that 100% of your customers become a member of your loyalty program – period.
Signs Of Success
Say it out loud with me… “Redemptions are good.”
A loyalty program that is never redeemed is not a successful loyalty plan. The best loyalty programs have a high rate of redemption. Remember, we want to build long-term loyalty – not run a flash-in-the-pan promotion. For the loyalty program to work, customers need to perceive value for their time and effort to participate.
You should also by now have a database of information that you can now market directly to.
Review and Measure Your Loyalty Program
Ultimately, you need to sit down and look at the data, confirm if the program is working.
You’ll need to get some reports out of your system such as total sales vs. total redemptions, and evaluate the return on your investment.
You may not be 100% successful at first try and therefore may need to make some adjustments to get it right.
Eventually, your loyalty program will begin to pay off. By then it’s on auto-pilot and you can turn your marketing attention to other things, like getting even more customers.
