Loyalty Points Program
Most places do a decent job of setting up a loyalty program. Most places do a horrible job of having a successful loyalty program. With one exception I have no idea what if any benefit I get from the many loyalty programs I am enrolled in, and therefore with that same exception, I have no loyalty to those businesses.
On one of my two key chains, I have these little plastic bar-coded tabs. One for the gym to which I belong, one for Giant Eagle (grocery store) and one for Borders Books (I read a lot). I have also had several punch cards for Starbucks (though I seem to lose them before I ever fill one out for a free cup of coffee), and over the past couple years probably another dozen credit card sized loyalty cards (I never carry) that rarely ever get used unless the I can have the store look up my number when I make a purchase (Best Buy comes to mind here).
My point here is that a good Loyalty Point program needs the following to be successful:
1) The ability for the consumer to easily and conveniently participate at the Point of Purchase. In other words, possibly a small key-chain card, and more importantly, the ability for the POS system to NOT require any loyalty card at all.
2) A clear and obtainable rewards program. I have no idea what my Best Buy loyalty program does, and I never get a free coffee at Starbucks because I always lose my required punch card. However, the program for my Visa card comes with a nice brochure that lists great items for which I can redeem my points, if I ever live long enough to earn the gazillion points required. My grocery store does a good job with this, I get 10 cents per gallon discount at their gas station with every $50 spent and it is marked on every receipt I get from the store. I am required, however, to produce my bar-coded card for each purchase.
3) Communication. You must inform your customers that you have a loyalty program, how it works, and the benefits that come with it. You must do this as often as possible, such as on the sales receipt, customer statements, in your newsletters, POS signage, and email blasts, etc.
Today's is a rather long lesson that is guaranteed to increase your bottom line if you meet the three conditions above.
The Loyalty Program for CPS is designed to work like a 3-tier frequent flyer program. You can name these tiers and set the point multiplier any way you like. For the purpose of this example, I am going to set up Par, Birdie and Eagle levels. In my virtual golf shop, I am going to automatically put every customer into the Par level and give him or her 1 point for every dollar spent in my shop. Once they reach $1,500 spent with me, I am going to promote them to the Birdie level where they will earn 1.5 points for every dollar spent. And finally, once they reach $3,000 spent with me, I am going to promote them to the Eagle level where they will earn 2 points for every dollar spent in my shop.
To get started, click Tools - Options - Reference Tables - Customer Loyalty Program and click Add.
On the next screen, enter the Name, Threshold and Multiplier of 1 for the Par level and click Save.
Repeat f
or the Birdie and Eagle levels, changing the Multiplier to 1.5 and 2.0, respectively. Next, let's go back and Edit the Par level to set the actual Threshold and Promote To fields. Highlight Par and click Edit.
Change the Threshold to 1500 and select Birdie from the Promote To drop-down list. This, in effect, will promote the Par level loyalty customer to Birdie once they reach the Threshold of $1,500.
Repeat for the Birdie level. Note: You do not need to do this for Eagle since that is the highest level you can reach, therefore there is nowhere to Promote to. Also note that if you so desire, you can also change the customer Sale Class when these thresholds are met. For now, let's leave that feature alone.
So, we have now established the Levels and associated Multipliers and Promotions. Let's now configure what products you have for which a customer can earn loyalty points. The most common is Green Fees.
Again in Tools - Options - Reference Tables - Sale Categories, select your Green Fee category and click Edit. Here we have several, so I will walk you through one of them.
Check the Loyalty box and click Save below. This will let the customer accumulate X points for each dollar spent on this Category (X=extended price x loyalty level multiplier). So, for Par it is 1 point per dollar, Birdie is 1.5 points per dollar, etc.
Repeat for each Sale Category for which you want to allow customers to accumulate points with their purchase.
Now, the final setup step is to indicate which products you want the customers to be able to redeem points for and how many points are required. Don't get crazy here! Make it obtainable -- maybe a free round of golf for X points, or a free foursome for Y points, or a free dinner, lesson, etc. One approach I like is to have some type of "Members Only" item -- something like a personalized logo golf bag, prominately displayed in your pro shop, but absolutely under no circumstances is it available for sale at any amount. The ONLY way to get one of these premium golf bags is to redeem X number of points for it. This could be a shirt, jacket, wedge or anything you like but make it high quality, personalized, coveted (we covet what we see everyday - Hannibal Lector) and the ONLY means of getting one is via the Loyalty Program.
So below I have set up in Inventory a Rodney Dangerfield Caddyshack bag, complete with remote control, stereo and beer tap. I set the price at $10,000 to put it out of reach of all but the most insane and I am going to promote via signs, newsletters, etc., that you can have this bag with your name on it for 3,000 loyalty points. To set that up in the database, pull up the product you want to be eligible for point redemption and click on the Advanced tab.
Click the Loyalty Points checkbox and enter 3000 in the box and click Save. This will permit the customer to redeem 3000 loyalty points in exchange for this product.
Repeat this process for any items you want. I would suggest different levels to keep them obtainable. For example, get a Bushwood hat for 50 points, get a free round of golf for 100 points, get a free bottle of wine with dinner for 80 points, etc. Be creative and have at least some items that you can ONLY get with loyalty points.
Try to make it so that when a customer redeems points, they have some left over. For example, if you allow them to earn points for an 18-hole green fee that cost $50, a customer will tend to have points in multiples of 50. So to redeem points for the same, make it something like 875 points. This will leave 25 points in their account once they redeem (assuming they do so when they get to 900 points). If you take them back to zero points, it is not as attractive to come back and be loyal to you. However, if they have a balance, they already have a head start on their next reward.
Communicate this to your customers constantly. There is an option to display loyalty points on the sale receipt -- make sure you turn it on.
As you add customers, put them in the Loyalty Program at the Par level. Also, update your current customers to the same. If you like, you can even give them a beginning balance (in the Customer screen on the "Other" tab).
Once you get to this point in the setup, the program will pretty much run itself. So while this may seem like a lot to this point, you pretty much only have to do it one time, with the exception of adding new items and keeping the ideas fresh.
Here is what happens on the POS side:
Notice that the note with Loyalty Points Earned and Total Loyalty Points now prints on the receipt. Eventually, Carl will earn enough points to redeem them for that shiny new Rodney golf bag.
Notice that when you put in Carl's name and pull up the Golf Bag item, there is a new button on the bottom of the screen labeled Loyalty Points. This button will only appear if there is an item in the sale that can be purchased with loyalty points AND the customer selected has enough points to do so.
Highlight the item (there can be more than one) and click Redeem Points.
This will list the details of the item you are redeeming. Click the Redeem Points button here and you will see the Points Redeemed field updated. Click OK and work your way back to the Sales screen.
Notice that now on the Sales screen, the line item price has been changed to $0.00 and the Notes field indicates that 3000 loyalty points have been redeemed for a savings of the original amount of the product, which will print on the sales receipt.
As promised, this is a long lesson but it comes with a big payoff. A successful Loyalty Program is like printing money! It is not as complicated as you think and our tech support staff will be happy to assist you in setting this up if you like. Just call and schedule an appointment. Since it will take a while and this is a busy time of year for support, an early morning or late afternoon scheduled call would be best. This is one lesson that everyone should embrace as it can easily have the software pay for itself and then some. Just remember to follow the 3 requirements at the start of this newsletter and you can't fail.
Enjoy :)