We know from 20+ years of building the natural food industry that customer loyalty is paramount in a market where natural foods are found on every street corner.  Retailers are looking closely at loyalty marketing tools, enticed by the promise of capturing more of their customers’ purchases.  But many are equally uncertain, having heard stories of failed loyalty card programs and confusing reports about negative consumer perceptions. 

Let’s clarify a few of these:

Myth:  Loyalty programs are discount programs.

Truth:  Loyalty marketing is not a discount or low-price strategy.  Successful loyalty marketing allows retailers to effectively target their best customers with rebates and special offers based on their shopping behavior.  Good loyalty marketing rewards customers who buy at regular prices, across categories and brands, shop more frequently and spend more of their dollars at your store.  Well operated loyalty marketing ignores cherry pickers and buy-only-on-sale shoppers and focuses on best customers in the top 15 – 25 percent who have higher than average market baskets, visits, and total spending.  Most loyalty programs require their customers spend to pre-established thresholds before rebates are given.  No discounting at the shelf or the register is required in these programs.  And while many reward programs offer rebates to their higher spending customers, rewards can take many forms – from special member events to coupons, from drawings for prizes to community donations. 

Myth:  Loyalty programs are too complex and cost too much.

Truth:  Ten years ago, collecting customer transaction information was expensive and complex.   No more. The advent of inexpensive computer storage and the capacity of the internet to transmit data gives natural product stores of all sizes access to flat fee, low-cost web-based software that can collect data, slice it, sort it, store it, pull it into reports and create promotions with a few clicks.  Stores can send promotions to targeted groups by purchase, gender, age, and interest.  The entire process today is simpler and easy for even small stores to operate.   

Myth:  Failed main store loyalty programs, like Safeway’s, Albertson’s or even Whole Foods Market, mean natural product stores will fail, too.

Truth:  Natural product stores have a much better chance of successful loyalty marketing than do high volume supermarkets for many reasons.  Natural product retailers generally have a higher staff to customer ratio which provides more personal customer service and opportunities for more authentic, engaging customer experiences.  Good health and green consciousness are motivators of most natural product shoppers, giving retailers a wealth of opportunities to sell “solutions,” not just products.  And natural product retailers have decades of practice educating customers about the value of high quality products.   Those that use database loyalty marketing can engage and entice specific segments of customers repeatedly with targeted promotion campaigns that more closely fit the specific customers’ interests and needs. 

Myth:  Health food stores don’t need loyalty programs because they already have personal relationships with their customers.

Truth:  Today, natural products are on every street corner.  Busy consumers want convenience.  If it’s more convenient for your customers to pick up a popular natural brand body care product at the local Bed Bath and Beyond, a key defensive tool is providing incentives to your customers so they resist the temptation and buy that product at your store.  And while you may know a few of your customers by name, your customer database is the only place you can find out how much your customers actually spend with you and if you are losing or winning the battle of convenience.

You can learn more truths about loyalty marketing in a new Business Booster, published by HealthERetailers. My partner, Debby Swoboda and I wrote Acquiring and Retaining Premium Customers and easy-to-read manual that gives statistics, facts, ideas, tips, and step-by-step plans for implementing a well-rounded, effective Loyalty program.  Call Living Naturally at 800-360-2231 or www.HealthERetailers.com at 941-772-9559 or e-mail us to find out how you can get a copy.  You can find our e-mail on the Contact Us page of our website.