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Creating customer loyalty programs that work

Many pool and hot tub retailers state the first reason for setting up a loyalty program is to keep customers from buying commodity pool/spa supplies from big box stores.

By Christina Braks

Retailers are always looking for ways to retain and gain customer loyalty whereby stopping their clientele from looking elsewhere for their swimming pool and spa/hot tub needs. One way of doing this is to establish a customer loyalty program that helps retailers develop long-lasting relationships with their customers, which is a key part of any business plan.

Where should this plan start and how are these programs created to entice consumers to regularly return, whether they are making online or in-store purchases? In most cases, retailers do not know where to start or are afraid of creating too much work, or worse, creating unnecessary expenses that cut into overall profits. For those retailers considering the idea of a customer loyalty program, this article provides tips on how to create, implement, and operate a successful program.

Getting started

There are three primary items to consider when building a customer loyalty program:

  1. What are the business goals?
  2. What will the structure of the program look like, what items (i.e. products, services) will be included, and how will the points be redeemed?
  3. How will the program be integrated and implemented into an existing accounting and point-of-sale (POS) system?

Business goals

Depending on what wants to be achieved, the structure of the program should reflect the business goals. For instance, many pool and hot tub retailers state the first reason for setting up a loyalty program is to keep customers from buying commodity pool/spa supplies from big box stores. These retailers want to provide consumers with a reason not to purchase these items at the local supermarket while they are grocery shopping, but rather at their store by rewarding them for the purchase.

One company that set up a loyalty program for this very reason is A&M Corsons, a six-store retail operation in Phoenix, Ariz.

“We set up a loyalty program when we discovered our customers were picking up chlorine tablets at their local grocery store,” says Cerah Gray, the company’s promotions manager. “Our goal was to get our customers to think twice before purchasing commodity items at the grocery store, because we were offering them a benefit to purchase at our retail stores.”

Other reasons why some retailers might be interested in establishing a loyalty program is to expand their customer base by reaching out to a different geographic region or because the company has added a service department and is looking to grow that business.

“Selling cleaning and maintenance services during our off-season is one of our key business goals,”  says Alex Soubliere of Friendly Fires, a retailer of barbecue and fireplaces with three retail locations in Peterborough, Kingston and Cobourg, Ontario. “We fundamentally believe that increasing our relationship with our current customers provides the greatest growth for our company. A loyalty program for our business means repeat sales and referrals from our existing customer base, and this has been key to our business success.”

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