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How to Make Your Loyalty Rewards Program a Success

How to Make Your Loyalty Rewards Program a Success by Elements magazine | pbahealth.com


October 14, 2013


How many loyalty rewards cards do you have in your wallet? Probably quite a few considering that the average number of loyalty program memberships per U.S. household is a whopping 22. Chances are your patients are enrolled in multiple loyalty rewards programs too. They probably earn points for shopping at their local grocery stores and frequenting their favorite restaurants. They’re also likely members of loyalty programs for airlines, hotels, clothing shops, convenience stores—you name it.

Loyalty rewards programs are a growing feature for businesses—both large and small—to offer to customers. Memberships in U.S. loyalty rewards programs topped 2.65 billion in 2012. That’s a membership growth of 26.7 percent from 2010 to 2012, according to a whitepaper by Colloquy, a research group that publishes information on loyalty marketing. The loyalty rewards trend isn’t just for grocery stores and restaurants. Memberships in drug store loyalty programs increased 45 percent from 2010 to 2012.

These staggering numbers suggest that now is the time to start a rewards program at your community pharmacy, if you haven’t already. “All of the big box store pharmacies are doing loyalty programs,” said Theresa Neal, sales/new business development for RepeatRewards, a loyalty program services provider. “CVS has a program. Wal-Mart has a program. Target has a program. It’s the number one thing right now to keep that competitive edge.

A bonus for business

Keeping up with the competition isn’t the only reason to look into a loyalty program. Community pharmacies strive to build personal relationships with their patients. What better way to show your patients your appreciation than with a loyalty rewards program? “The hardest goal for any business owner to achieve is that of retaining, thanking and rewarding their dedicated customers,” Neal said. “A good loyalty rewards program will do all of that for them.”

What’s even better, building stronger relationships with patients also increases business. A loyalty rewards program drives more business because your best patients stick with you—and, even better, they keep coming back. “When a company builds customer loyalty through rewards it’s actually securing guaranteed future sales,” Neal said.

“Loyalty programs have gained popularity with businesses because it’s much easier to keep an existing customer happy and coming back than it is to persuade a new customer to come in.”

This idea goes with the 80/20 rule that 80 percent of your business comes from 20 percent of your customers. A loyalty rewards program is a great way to keep those frequent customers happy.

Creating a successful program

Consumers may sign up for dozens of loyalty rewards programs, but the real question is whether or not they use them. Less than half of loyalty program memberships per U.S. household are active, according to Colloquy. So, how do you make sure that your pharmacy’s rewards program is one that your patients actually use?

Start with branding. Everything about your loyalty rewards program should be customized to fit your pharmacy. “Don’t have it look like your program is coming from someone else,” Neal said. “Use your pharmacy name in your program name. And, definitely go with custom membership cards, signage and branded brochures.” Branding helps your customers remember that this rewards program is through their favorite hometown pharmacy.

As you design the details of your program, remember to keep it simple. “The best programs out there earn one point for every $1 you spend,” Neal said. “It’s easier for the customers (and for your staff) to understand.” Make the system easy to follow with straightforward reward goals, such as offering a $10 reward when patients hit 300 points. If your patients are confused about how the program works, then they’re not going to use it.

Also, don’t forget to make patients aware that you offer a loyalty program. “The number one reason that people don’t join loyalty programs is because they were never asked,” Neal said. Make sure to train your staff about the program so they can market it to patients.

Every time patients head to the register to pay for their purchases, have your pharmacy technicians or clerks ask, “Do you have your membership card with you today?” For those patients who aren’t members, it creates an opportunity to enroll them in your program. “It really becomes second nature for your staff,” Neal said. “It’s just part of their ‘Good morning’ or ‘How may I help you?’”

Easier marketing

As your patients make purchases, earn points and work toward earning their rewards, you build something valuable to your business: a database. The database will tell you beneficial information, such as how many customers are coming in to your pharmacy, how much they’re spending and what their shopping habits are like. Your loyalty rewards provider should maintain this database for you, but you choose how the information gets used.

One way to make the most of your loyalty program—and the information you collect—is through additional marketing. “You need to have a program that’s all encompassing,” Neal said. “Think about it not just as loyalty, but as total marketing. When you have that marketing piece behind your loyalty, you’re going to have much more success.”

With information from your database of loyalty members, you can send patients special email offers or direct mail pieces to bring in more business. Mail new patients a welcome reward for signing up for your program or send patients a discount for $5 off a $25 purchase to use during their birthday month. Additional marketing is a great way to drive foot traffic to your store. “You really need to touch customers more often than just that reward,” Neal said.

You can also target certain segments of your current or potential patients, such as senior citizens or people who just moved into the area, for better marketing. “It’s much better to target market than to just blanket out an offer and hope you get a good response,” Neal said.

The method you use to send the targeted marketing pieces depends on your patient demographics. “We find that in the pharmacy industry, the clientele is typically a little bit older,” Neal said. “These are their golden customers, and the best way to market to them is through direct mail.” If you have a younger demographic, consider sending them promotions and rewards through email. Or, ask if your loyalty rewards provider can implement a mobile app with your program.

Any avenues that you can reach your patients more often than just the reward will enhance the success of your program—and your business. “Loyalty members spend more money and they visit more often,” Neal said. “And, it’s all because of the marketing behind the loyalty program.”


What’s in your wallet?

Many loyalty program services today don’t require that people actually carry a physical membership card. Customers can earn their points by simply giving the clerk their telephone number. Before going paperless at your pharmacy, you should consider that customers might like the physical card. “We’re finding that people really want that card,” said Theresa Neal, sales/new business development for RepeatRewards, a loyalty program services provider. “It makes that person feel like they belong. It’s that reminder in the wallet. The card actually has a huge importance to make people feel like they’re part of that pharmacy club.”

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