Retain Customers with a Rewards Program as the Economy Stabilizes

Retain Customers with a Rewards Program as the Economy Stabilizes

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The nationwide and worldwide lockdown measures implemented as part of the effort to slow the spread of COVID-19 have caused dramatic declines in the economy. But not all industries have been impacted to the same degree. In the beauty salon industry, there has been a 90% drop in revenue, whereas the restaurant industry has only lost half of its former revenue. Offering curbside pickup and delivery kept this industry in business. The pet supplies industry has been fairing remarkably well, but that’s to be expected since dog and cats, like people, have to eat daily.

If you own a tobacco store, then you belong to one of the luckier industries that experienced near “normal” sales over the course of the last three months. Grocery stores, liquor stores, and also convenience stores retained relatively normal operations, and their bottom lines weren’t disrupted too noticeably. But as retail stores of all kinds begin to open up, all that could change.

Why, you ask? Because for the duration of the pandemic this far, about 70% of retail was deemed “non-essential” and those stores were forced to completely shut down. For the average consumer, this meant that there was suddenly far less businesses to shop at. Having fewer choices caused unintentional loyalty. Whereas prior to the outbreak, Ms. Consumer might have bought her goods at ten different stores, now there is only one store that has remained open. Chances are, you have been that one store if Ms. Consumer has maintained a fondness for lite lady cigarettes. The lockdowns have benefitted your store in this way.

But what is going to happen to your bottom line when the unintentional loyalty that Ms. Consumer was providing disappears because she can now purchase her favorite brand at a newly reopened retail store that just so happens to also sell cigarettes?

There is a very real risk that you could experience an adverse effect as businesses in other industries reopen. So, how can you ensure the retention of all of the customers who have been loyally patronizing your tobacco store? What can you do to maintain their loyalty so that they keep choosing you despite having more and more retail options each and every day? 

Offer your customers the opportunity to join your tobacco store’s customer loyalty rewards program.

But what if you don’t have a rewards program already in place at your smoke shop? Many tobacco retailers in fact have not implemented such a program yet, and you could be one of them. The main reason this occurs—and perhaps this has been your reason, too—is because manufacturers of tobacco products have their own customer loyalty rewards programs in place, and since your retail customers may already be signed up with them, you figure why would they want to sign up for a second program just to patronize your location?

Let us first assure you that any paying tobacco customer is not going to turn down an opportunity to save even more money. Yes, manufacturers offer deals, discounts, and rewards incentives all the time. Brand-loyal smokers often take advantage of these opportunities to save money on cartons or simply cash in on fun merchandise that boasts their favorite brands. A solid customer loyalty rewards program that is offered on the retail level at tobacco shops won’t contradict or discredit manufacturer coupons. If anything, it will compliment them, integrate smoothly with major brands, and only serve to further show your personal appreciation for your returning customers.

So, what is a customer loyalty rewards program that is issued from a tobacco store on the retail level? For an in-depth answer, you can always check out a separate article we’ve written on the subject, What Is A Loyalty Program? To refresh your memory, the shorthand definition describes loyalty rewards programs as a marketing method used to attract and retain customers for the purposes of increasing overall revenue. In practical terms, customers who enroll in a loyalty program are given a membership card to use every time they shop. Their purchases are digitally recorded and each expenditure comes with “rewards points”. As these earned-points accumulate, the customer can eventually redeem the points by applying them towards future purchases, which causes the cost of those items to essentially be discounted.  

Why is this one of the most effective methods to secure customer retention? Because it encourages a shopper to shop exclusively at your tobacco retail location since buying from your competitor won’t earn them rewards points. We’ve actually dedicated another blog article solely to the importance of customer retention and if you’d like a solid foundational understanding, be sure to read, Why Is Customer Loyalty Important?

If you’re still on the fence and aren’t convinced that offering a rewards program at your store will be worth the trouble, especially considering all the other headaches you anticipate as you keep operations running smoothly as part of your COVID-19 measures, then let’s compare how a straightforward rewards program stacks up against other popular marketing strategies designed to increase customer retention.

The Traditional Store Coupon Strategy

While you have likely been accommodating manufacturer deals by scanning and applying manufacturer coupons when your customers present them at the counter, you have probably also been advertising your own store promotions, and the method of your marketing effort in this area has likely been to either hand out physical coupons or have a stack of them resting on the checkout counter for your customers to pick and choose from. This is the traditional way of distributing coupons and it was very effective for a time.

But as our culture has shifted from physical items to digital ones, the average consumer has become less likely to collect and use paper coupons. As eco-friendly individuals, we’ve culturally embraced buying e-books over hardcopies. Amazon’s Kindle, which was quickly emulated by Barnes and Noble with the Nook and also Google with iBooks, is solid evidence of this. Who writes letters anymore? We have e-mail and its more immediate grandchild, SMS text message. Only the most outdated office would print memos and stuff them in employee inboxes… remember when every corporate desk had a plastic basket for such things? We do, and we don’t miss them! People prefer digital over physical, and you can use this steadfast trend to your advantage when you implement a loyalty rewards program.

When digitized, coupons are used far more often than they would be otherwise if they came in paper form. Remember, an increase in coupon use is an indication of increasing sales.   

The Personalized Product Recommendation Strategy

Another immensely popular strategy that has been used to retain customers is all about personalization. In the olden days, a shopkeeper would be mindful to put names to faces, remember customer favorites, and make on-the-spot recommendations at the counter so that the shopper wouldn’t discover later that day that an important item they should have bought was overlooked. The small-town nature of these shops naturally provided a level of care and relationship between the store and customer.

Today, shoppers still appreciate this level of care and the kind of relationship it builds, but it isn’t so easy to orchestrate with your sales team when they encounter dozens of customers a day. In fact, recognition efforts have evolved since the horse and buggy era. By and large, as cash register systems shifted from analog to digital, innovative methods to collect customer data also began to evolve. The average point of sale system in 2020 is able to digitally track customer shopping histories, which is a great tool that helps your staff to make personalized recommendations at the counter. But no matter how brand-spanking-new your POS is, the personalization protocol it uses does nothing to promote sales until the customer is standing at the register. So, how do you get customers to come into your tobacco store in the first place?

This is where your customer loyalty rewards program can not only pick up the slack, but do all the heavy lifting. That being said, not all rewards programs have been created equal. Recently, there has been a significant issue with email marketing attempts. If a customer loyalty rewards program is sending out emails, the sad truth is that the majority of those emails are not being opened. If this has been a concern of yours that has prevented you from implementing a rewards program at your tobacco store, then we have good news. There’s a way to reach your loyal customers without sending emails that are destined to hit the Spam box, and we’ll get into that option later.

The Community & Communication Strategy

Instant, thoughtful, and accommodating customer service is a major corner stone of best business practices. No matter the industry, every company—from enterprise corporations to the smallest startup—knows that without strong customer service, their business could get badmouthed. In the internet age, one bad review that goes viral can forever tarnish the previously stellar reputation of a company. And if the company is in the retail sector, the fallout could become dramatic.

Prompt and understanding customer service are the antidote. While it’s impossible to prevent every customer from having an issue, it’s extremely possible to correct whatever issue arises. But if that issue isn’t immediately addressed, then you aren’t doing yourself any favors. The #1 factor that most greatly impacts a customer’s experience, even when they have an issue, isn’t how the issue is resolved, but rather how quickly. You might even have experience fielding angry calls from dissatisfied customers. But did you know that in 2020 most consumers prefer to contact companies, whether for customer service-related issues or simple store questions, digitally?

It’s true. Regardless of what kind of retail store the shopper is dealing with, they actually prefer to use social media DMs, or direct messages, to get in touch. Why? Because it’s fast and convenient for them. Unfortunately, many retailers don’t respond quickly enough when social media is used, because for them it isn’t considered convenient. Nearly 70% of DMs go unanswered by retailers. That’s no way to increase customer retention. In fact, that’s a fast way to lose customer loyalty. However, when a customer loyalty rewards program is in the mix, the response rate has been proven to dramatically increase. In fact, rewards programs that exist within a well-built mobile app make both customer and retailer communications fast, easy, and successful. These apps also provide additional methods of communication and feedback, and ultimately provide an appreciated sense of community, all of which can exponentially strengthen customer loyalty. 

But of all the rewards programs that are out there on the market today, which one should you invest in? If you’ve gleaned a few critical elements as you’ve read this far, then you’ll probably agree that the best customer loyalty rewards program is going to include a mobile app. The app must be so comprehensive and all-inclusive that it makes plastic membership cards and email marketing obsolete while at the same time enhancing the shopping experience. In short, you want a rewards program app that was designed for tobacco retailers and has been proven to increase customer retention and revenue.

Loyal~n~Save offers precisely that. Because Loyal~n~Save is a digital marketing tool that has been built into a fun, user-friendly mobile app, it is the best option available today. Every customer retention strategy outlined in this article has been mastered within the Loyal~n~Save app, including:

  • Easy integration with tobacco manufacturer coupons, deals, and discounts
  • Mobile app sign-up that makes plastic membership cards a mere option
  • In-app personalized shopping recommendations that increase buying
  • Fast customer service technology that builds brand recognition, reputation, and loyalty

To learn more about the ways in which Loyal~n~Save can help increase customer retention at your tobacco store, visit our website, and if you’d like to read more helpful marketing blogs for retailers and the retail industry at large, the Loyal~n~Save Blog posts weekly articles to support your business efforts to get through the COVID-19 pandemic and beyond.   

This article was written by Loyal-n-Save, an omni-channel customer loyalty solution for retailers looking to increase customer retention and new customer acquisition.
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Douglas Nolan
Written by Douglas Nolan

He believes in solving real problems with realistic technological solutions that stand the test of time. Seeing his clients struggle to retain consumers, Douglas decided to help his clients by offering affordable and top-class loyalty solutions. Doug loves transforming the lives of his employees by assisting them to develop a solid blend of TQ (Technology Quotient) & SQ (Spiritual Quotient) to excel in their professional & personal lives.

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