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Why your grocery marketing strategy should deliver both loyalty and promotions

By Lucy Sharman-Munday
Loyalty and promotions are the twin pillars of customer acquisition and retention strategies, and the grocery industry in particular is well-versed in these time-honored approaches. Promotions attract new customers and increase basket size, while loyalty programs reward high-value customers to keep them engaged with the brand. This is grocery marketing 101 for a good reason – these tactics work.
Too often, though, grocers consider loyalty and promotions as separate strategies, missing out on the multiplicative benefits of one strategy that works hand-in-hand. When loyalty and promotions work together, grocers can drive revenue from all customers – those who are willing to participate in a loyalty program, and those who haven’t engaged yet.  With loyalty and promotions working together, brands can nurture the emotional side of the customer experience, and ensure that customers are getting what they want out of their interactions with the brand.
And even if some grocers have considered this approach, they aren’t using promotions as a way to nurture customers, show consistent value, and ultimately, influence them to join the loyalty program.

The benefits of loyalty

The primary aim of any loyalty program is to create stickiness between customers and the brands they love, delivering value, personalization and convenience to members while encouraging repeat business. But there is additional, equally important value that loyalty programs deliver to retailers: insights into the behavior, preferences and motivations of a brand’s most valuable customers. Loyalty programs also open a direct communication channel between a brand and its best customers, creating a more emotional engagement. 
A well-executed loyalty program collects data from all shopper touchpoints to provide actionable information that can be leveraged for purposes beyond customer retention. It can inform ideal buyer persona development, acquisition strategies, and overall marketing approaches.
If customer data captured by loyalty programs is this important, connecting it with other promotional offers only doubles its value, preventing a “clash of offers” that would otherwise undermine personalization efforts and diminish the effectiveness of both the program and the promotion. This is why it’s crucial that grocers deliver a unified loyalty and promotions strategy.

The promise of standalone promotions

Standalone promotions, for their part, are good at driving spend, increasing basket size, and enticing new customers to cross the threshold into the store. When crafted and deployed well, they expand the mouth of the sales funnel while simultaneously sparking the next purchase. The key to effective promotions is balance – developing incentives aimed at the range of products that are neither staples nor splurges, or always-buy/never-buy items.  This type of promotion is most likely to drive the desired customer behavior.
These promotions don’t necessarily need the framework of a loyalty program to achieve positive results, but when paired with a loyalty program, they become exponentially more effective at driving revenue.
Promotions strategies, beyond their key priorities of attracting new customers and driving spend, should endeavor to deliver enough value to non-loyalty members that they become willing to share their personal information. It’s at this point that a grocer can identify each customer and begin engaging with them in ways similar to those in their loyalty program: email, SMS messages, mobile apps, on social media, through customer service, their website, and most importantly, in-store.

Putting it all together

But for an effective engagement strategy that continues to provide value to each customer, brands need access to all of that data in one centralized platform. When data is connected in one single customer view, grocers can present rewards, offers and communications tailored to each shopper’s purchasing habits and preferences in the right channel at the right time. This in turn leads to new and higher levels of engagement, an enhanced shopper experience that exceeds customer expectations and ultimately, higher conversion rates due to the accuracy of the offers distributed.
It also enables grocers to achieve the three C’s of successful loyalty: identifying and understanding the customer by collecting their data into one single customer view to appropriately segment and target them; delivering dynamic and engaging content needed to gain and maintain interest; and creating a digital connection between the store and the customer to not only deploy content or promotions but to solidify the emotional connection the brand.

Grocers can’t just snap their fingers and magically connect all of the customer data into a single customer view. But they can put the systems in place to facilitate that process, and technology is available to concurrently execute loyalty programs, real-time promotions and offer deployment. By choosing a partner like Eagle Eye with these capabilities, grocers can have it all: a loyalty program that rewards those shoppers that represent a disproportionate percentage of their revenue, and a promotions system that is optimized to generate the next sale.
If your grocery operation is ready to combine approaches to loyalty and promotions, Eagle Eye is ready to provide the technology solutions to make that possible. Contact us here.