Once upon a time…

Remember the friendly neighborhood grocer of yore? He knew each one of his customers by name and he knew just what they bought. He would fill up your basket with just the right things while he chatted with you about work and kids and their school. The weekly grocery shopping was a pleasant experience and never felt like a chore. Whatever happened to him? Well, as the years went by, the neighborhood grew, so did his clientele and with it grew his business. From a small shop it became a multi-aisle departmental store. He needed more people to manage his business, he needed more space and better organization. And that's how mom-and-pop establishments gave way to organized, professionally managed big retail chains. With the growth in the Consumer Packaged Goods (CPG) industry and organized retail sector, newer products flooded the market. Deciding on what to buy was getting complicated. Grocery shopping was progressively becoming an impersonal experience, it was becoming a chore.

Growing up…

With so many retail stores and products to choose from, the average consumer was finding it difficult to lock in on his buying pattern. At the same time, the retail stores were struggling to create a customer base and provide them with personalized service. It was hard to get the customer return to them, harder still to know what he would be looking for. Stocking everything was a logistical impossibility. Enter the Loyalty Program. The loyalty program was not a new concept. A lot of services based industries were regularly using one variant of it or the other but it was the retail sector where it made most sense, after all grocery is something that everybody buys.

What is a loyalty program?

A Loyalty program, as the name suggests, is the art and science of making a customer loyal to your organization by providing him with services that would make doing business with you a rewarding experience. The goal of any loyalty program is to get 100% of the customer’s business. The objectives can be summed up in the following points -

• Increase the number of valuable shoppers
• Increase the number of loyal shoppers
• Meet the needs and desires of more shoppers
• Focus resources on achieving those goals

But how does one do that in the retail sector? Or any other consumer centric business for that matter? There are several ways a loyalty program can be implemented - some reward the customer while some offer status and exclusive membership to entice; yet others join hands to provide the customer a wider range of preferred services.