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June 2, 2016

Loyalty programs were made popular by airlines in the 1980s, many years after Green Shield Stamps and Betty Crocker box tops. The first frequent flier program was introduced in 1981 by American Airlines, which now boasts over 50 million members. Loyalty programs, in theory, are designed to increase customer retention and instill a sense of “membership” with the company. Customers appreciate that they are getting something back for their repeat business.

These programs are widely pervasive today. I counted over 30 loyalty programs that I personally belong to, including hotel and airline memberships. Out of the total, several are retail memberships for places I shop regularly. There are chain store-specific programs for Best Buy and my large regional grocery chain, but there are others I use that are non-store specific and include local businesses like my barber and a small single-store grocer in my neighborhood. They use smartphone-based QR codes to log in a purchase. When I rack up enough points, I can redeem them at any of the member stores.

The big chains use several different methods to capture a purchase. Keyring cards or larger credit card swiping technology is used by most. Some allow telephone numbers to be entered when you don’t have the physical membership ID to log in.

I also use the Starbucks loyalty program on my smartphone. This program allows me to order ahead of time, pay for my purchase and find a store nearest me, among other features. When Starbucks changed the program in February of this year, customers were so upset that it trended for a month on most social media platforms.

What I found interesting about the program used by my single-store grocer is that the program is designed to link together smaller specialty retailers where customers live. On a personal level, it’s almost like a community loyalty program. If you shop where you live to support local businesses, you’ll be rewarded for your frequent patronage.

I realize that some pet specialty retailers do not use point of sales systems, but that does not mean they can’t employ a loyalty program. There is a greeting card store in my neighborhood that offers punch cards. On the 10th visit, you receive a free greeting card. For retailers that use POS systems, these programs become a great help in building customer databases, creating and deploying email campaigns, and other marketing initiatives.

I recently learned of a loyalty program that links pet suppliers with retailers and retailers with their customers, all on the same platform. Astro Pet Loyalty links manufacturers, distributors, retailers, veterinarians and pet owners all on the same platform for a total end-to-end program.

According to Brad Moseley, VP of Pet Specialty at Astro, their platform ends the need for UPC redemption. One scan at the POS sends information to the distributor and manufacturer while logging the pet owner’s purchase—simple. There are many loyalty program providers out there that want your business. Search for them online, ask for more information and judge which program makes the most sense for you and your customers. Of course, these programs are not free, but it appears they can pay for themselves over time. How long will that take? That depends on how loyal your customers are.

All the best,

Allen Basis

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