7 Grocery Store Loyalty Program Mistakes and How to Avoid Them

Grocery store loyalty programs have become an essential part of grocers’ business strategies. A loyalty rewards solution integrated with grocery store software helps grocers compete with stores selling lower-priced private label brands and big box stores that evolved into supermarkets. A well-designed loyalty program increases basket sizes, strengthens customer relationships, and incentivizes future purchases. However, mistakes with grocery store loyalty program planning or implementation can stand in the way of those benefits. 

Avoid these seven common grocery store loyalty program missteps so you can build your business and give it a competitive edge. 

1. No Clear Objectives 

Grocery store loyalty programs, like any customer engagement or marketing initiative, need a clearly defined purpose. Do you want to grow revenue by offering loss leaders to loyalty program members to build traffic? Do you want to enroll customers to build your marketing list and collect data on your customers’ shopping habits? Do you plan to use gift cards as loyalty rewards to incentivize future purchases? What you want to accomplish with the program should inform how you design and run it, and you should make all decisions based on making progress toward your goal. 

2. Not Understanding Your Customers 

Once you’ve determined goals for your loyalty rewards program, you need to tailor it to your unique customer base. It’s wise to start with industry trends. For example,  Chain Store Age reports that 84% of consumers want gamification, and when 59% win games, they’ll shop at the store to redeem their rewards. That same research also found that 42% will purchase specific products after receiving personalized offers. However, you need to determine if your customers will respond to those tactics in the same way. Your point of sale (POS) system contains data about your customers’ behaviors and information from past promotions that can help you determine what works with your customers. Data that you have collected with your grocery technology will help you make informed decisions about your loyalty program and make effective, targeted offers to segments of your marketing list. 

3. Overly Complex Rules

Your customers should be able to read how your grocery store loyalty program works and believe that it is easy to participate in it. Whether you choose to offer points-per-dollar-spent, tiered rewards, or discounts on loyalty member exclusives, make sure you establish and communicate the details of your program simply and effectively. 

4. Weak Grocery Store POS System Security

You are accustomed to protecting payment data to comply with the Payment Card Industry Data Security Standard (PCI DSS). However, you also need to protect your customers’ personally identifiable data and their privacy when they enroll in your loyalty rewards program. Ensure that your grocery store POS system has the multilayered security necessary, including network security, data encryption, and multifactor authentication, to protect customer data and comply with regulations such as GDPR and CCPA. 

5. Not Promoting Your Program 

Customers shouldn’t find out about your loyalty rewards program only when they’re ready to pay at one of your grocery store POS system terminals. Spread the word on social media, with signage, on receipts, and on customer-facing screens. When you capture a customer’s attention with your program promotion, make it easy to enroll with a QR code they can scan to set up an account. Ensure enrollment is quick by requiring only necessary information like name and email or mobile number so customers complete the form. 

6. Not Monitoring Performance

Even if you solicit feedback before launching or initially see good performance, it’s no guarantee that your grocery store loyalty program will deliver the results you want long term. Establish a baseline with data from your loyalty solution and grocery store POS system and monitor performance over time. If you see participation or rewards redemption begin to decline, adapt your program to current trends, consumer preferences, competitor activity, or other drivers. It’s smart to choose a flexible loyalty rewards program solution that gives you the freedom to administer your program in a wide range of ways. This makes it easy to adapt as your needs evolve, as opposed to ripping and replacing your loyalty rewards program software or settling for software that doesn’t support your goals. 

7. Underestimating Management Time

Grocers often underestimate how much time administering a grocery store loyalty program will take, particularly if they implement a standalone solution. Fortunately, seamless integration with a comprehensive grocery store POS system automatically credits customers with points or rewards and allows them to redeem them in-store, online, or when shopping on a mobile app. Software that handles management ensures smooth customer interactions in addition to saving time at checkout and in the back office. Also, before choosing a loyalty rewards solution, learn how much time it will take to reconfigure when you want to change your program to be more competitive or more closely align with new consumer trends. 

How to Launch a Mistake-Free Loyalty Program

One way to ensure you make the most of your grocery store loyalty program is to partner with a store management solution provider with both industry and technology expertise. LOC Software offers ThriVersA, a modular solution that allows you to optimize retail performance your way. The ThriVersA suite includes loyalty rewards program software that gives you the flexibility to create any type of program, allows you to segment lists by sales, basket size, visits, or profit, and enables you to analyze data from your program for informed decision-making. In addition, your LOC consultant can help you weigh your options, evaluate tactics that other stores use, and land on the best framework for your loyalty program. 

Contact us to learn more about how to design and implement a loyalty rewards program that works for you.