Happy hour

The Future of Loyalty Programs

Millennials love instant gratification, so if you own a retail business or restaurant, how are you meeting their needs? It’s a good question to ponder, as this group represents the most important one for your future-planning. Research from Restaurant Marketing Labs shows that on average millennials spend more money dining out each month than non-millennials, while a U.S Chamber of Commerce report indicates that 16- to 35-year-olds outnumber baby boomers (51 to 69-year-old) as the largest generation group in America.

Millennials are accustomed to ease-of-use: They use their smartphones for just about everything (shopping, news-reading, dating), rarely carry cash, and while they enjoy the benefits of loyalty programs, 27% of them have quit a program because it was too complicated to participate in.

What does that mean for your loyalty program? If you want to get millennials on board, it’s time to kill the punch card and move to a more agile, user-friendly digital system.

Provide personalized offers

A strong loyalty program is only as good as your customer information. Strategic use of an mPOS system lets your business collect and analyze data about who is coming through the doors and what their favorite items are.

Instore customer analytics can help keep your loyalty program relevant, by letting you track individual and aggregate data on purchase history, and optimize offers with specific appeal. For instance if a customer generally comes in for a lunch to go, send specialized offers for a dinner coupon to get them back for a meal with friends. If a customer is a big spender but comes in infrequently, send them a discount coupon with an expiration.

It’s not just about money

You also need to think creatively to win over this generation. Gifts, prizes, games, and contests linked to your brand appeal to millennials who love to multi-task.

Your program might also offer benefits just for loyalty program members, such as a happy hour event or an exclusive shopping event when new inventory arrives. This approach minimizes financial outlay for your business, compared to discounts on sales, or freebies, and creates a community vibe around your establishment.

Give the people what they want

With a POS system, you can access an abundance of easily aggregated, specific information about customers’ habits, so your loyalty program will be on target. You can use it to seek feedback to learn what type of loyalty rewards are most desirable.The new, connected generation of millennials is willing to use social media, or an app, to answer questions about their habits or take advantage of programs that will help them save time.

Loyalty program contact information can also be used to set up a survey to solicit feedback about how you connect with customers. Is the loyalty program too complicated? Do rewards accrue quickly enough and are they easy to redeem? Does your retail business send out too many emails?

It’s important to sustain the relationship you create with loyalty members, which is easier the more information you have. Some businesses use tiered rewards, linked to a loyalty program app, to give members more to work toward, such as offering points per visit, with members moving up a tier after a specific number of visits, earning additional points. This has the advantage of prompting return visits, and is similar to a game platform.

Streamline your system

Millennials don’t want to carry around a dozen punch cards in their wallets. By incorporating a loyalty program into your mPOS system, you can link the loyalty membership directly to a participant’s phone number or credit card—ensuring that it’s a seamless process for your customers to sign up and continue earning rewards, providing you, in turn, with valuable data that will help you optimize operations.

Loyalty programs have long been out of reach for smaller businesses, but now it’s simple to develop a cost-effective program that will help your business lure millennials (and every other age group) with a fun and easy-to-use rewards program.

Photo copyright: beyrouth by CC BY 2.0