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Technology/Services

Are Less Frequent Guests the Key to Loyalty?

A brief from Paytronix says so

NEWTON, Mass. -- Low-frequency customers may be the key to a successful loyalty program, according to a new report from Paytronix, a reward program solutions provider for the retail and restaurant industries.

Setting an ideal goal of more than 15% of sales being attributed to the loyalty program, the Paytronix Data Insights report reveals that, as a good program matures, the majority of new members come from low-frequency and infrequent guests. This guest segment presents the marketer with the largest opportunity for increasing the number of times these guests visit a brand, resulting in more incremental visits won from competing brands.

Medium- to high-frequency guests will be the first to join a brand’s loyalty program, according to the report. However, by month four, the proportion of new members who have medium- to high-visit frequency drops to nearly one-sixth, with the majority of new members falling within the low and infrequent segments.

The Paytronix Data Insights team has determined that a brand usually cannot reach 15% penetration by enrolling only its best guests. And to achieve higher levels of penetration, it is even more important to be skilled at enrolling lower-frequency members. Here are three tips to get low frequency guests into a loyalty program:

Target the program design to the right segment - Focus the design on low-frequency guests. They will need to understand the value proposition quickly and be compelled to join on the spot.

Make it easy to join the program - Offer multiple ways to join the program, such as through mobile apps, text-to-join, mobile-friendly registration web pages, kiosks, iPads in the store, and even paper registration forms.

Always be enrolling - Employees are a programs’ best ambassadors. They must understand how it benefits them, it must be simple for them to use, and it must be easy for them to explain the benefits to guests. Falling short in any of these three areas will likely discourage your servers from inviting guests to join the program.

“When setting goals for the organization, be aggressive and aim for at least a 15% loyalty penetration rate,” said Lee Barnes, head of Paytronix Data Insights, Newton, Mass. “Getting to this level means you will need some lower-frequency members, which is also the key to producing incremental revenue. Experienced partners know how to design the program to attract this group of clientele, employing ongoing enrollment campaigns that are designed to compel the infrequent group to join the ranks of the brand’s most engaged customers.”

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