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Rewarding Customer Loyalty

Furniture World Magazine


There are 3.3 billion loyalty program memberships in the US, an
average of 29 per household. That pretty much says it all.

Consumers love loyalty programs and they work when executed properly.

As your customer relationships grow, so do your profits. Some people only look at the fact that 12%-15% of consumers may be loyal to a single retailer, BUT, that small percentage of loyal customers, according to the Center for Retail Management at Northwestern University, can generate 55%-70% of your company’s sales.

The goal for any Loyalty or Rewards marketing platform is simple: to build trust among recurrent customers, rewarding them for continually conducting business with a company and to attract new customers with the promise that “you take care of your loyal customers.”

Yep! We all know or have heard the old 80/20 rule. For many companies, 80 percent of their business comes from 20 percent of their customer base; if so, why don’t retailers and brands in our industry implement customer loyalty programs?
This article isn’t just for retailers, but for manufacturing brands as well. Think about this as part of your go-to-market strategy because all people are consumers all the time and their behaviors rarely change when they have an “open to buy” anything. Manufacturers need to re-think how they do business in this tough economy. There is an opportunity for them as well to use the strategies and tactics detailed below, to move the 80/20 needle to perhaps a 65/35 or better. Before delving into the specifics of how you can set up your own loyalty program, I will share with you some of my personal favorites:
  • Macy’s – my favorite store of all time.

  • My local coffee place, Wake Up Call (nope, not Starbucks).
  • Grocery store – I get coupons in the mail and discounts on gas.
  • Dick’s Sporting Goods because I love the outdoors.
  • Pier 1, keeps me informed about new stuff for my home, and they make it fun.
  • Jema Lane – local boutique – only on Facebook. They send out emails, PLUS I get a special offer/promotion discount on my B-day.
  • Victoria’s Secret (duh!)

Add airlines, hotels, car rentals and more, and guess what the bottom line is? They all make more money on ME, because I’m part of their loyalty rewards programs. Here are some interesting facts to support why you might want to start your own program:
  • 86% of marketers ranked mobile loyalty campaigns as very effective or effective (Salesforce) 
  • Receiving rewards influences behavioral metrics across both sexes: 65% said it impacts frequency of purchase, 64% said it influences the amount they spend and 69% said that it influences brand trial (Cherry London)
  • More than 71% of those making $100,000 or more a year are enrolled in a loyalty program (Software Advice)
  • The participation rate in multiple loyalty programs is about 10% higher among slightly older millennials (25-34 years old) than younger (18-24 years old) (Software Advice)
  • 72% of women said rewards make them spend more vs. only 56% of men (Cherry London)
  • Over half of consumers surveyed said they wanted to see a brand “invest heavily” in rewarding them (Cherry London)
  • 57% of mobile users admitted that loyalty programs and points are the top feature in a mobile wallet, with 56% giving that title to discounts and deals (Forrester)
Here are three major benefits to having a good customer loyalty program:

Acquire New Customers

Think about your advertising and marketing costs with one simple question: What is the cost for you to acquire new customers vs. the cost of keeping existing customers?

Loyalty programs for your store can be a point of differentiation when a consumer is shopping for home furnishings in your local market. If you were a consumer, would you shop first at a store that rewards your purchases and allows you to accumulate more points for discounts on future purchases? Or, would you just ignore that and prefer to pay full price with no rewards at all? (I can’t think of any Big Box retailer that doesn’t have a reward program. Why? Because they work.)

Increase the Ticket

Loyalty programs have proven to lift the typical sales ticket. Imagine if your consumers could use their points to add on items such as accessories to a living room furniture purchase and more. Sure the points they use may discount those items, BUT would you rather have 30% of something vs. 100% of nothing? It also gives you the opportunity to promote higher-margin products by offering points to facilitate a transaction that otherwise might not happen.

Customers Come Back

Again, look at how you shop? When you buy an airline ticket, I bet you shop the top two airlines where you’ve accumulated points, as well as hotels and car rentals. How about other shopping behaviors? Clothes, shoes... ok, I love shoes - what woman doesn’t? - restaurants and it goes on and on. I have so many loyalty programs, I even found an APP for them, it’s called CARD STAR where I can have them all stored on my mobile device for ease of access...so I ALWAYS get my rewards.

Check out the statistics in the chart above that explains how consumers want to engage with your loyalty rewards program.

And, there are so many additional opportunities you probably already have in place, on your website and social media that can be used to create synergies, such as:

Sign Up For Offers, Like, Follow Or Pin

  • Get consumers to “sign up” for offers/e-blasts. When they do, assign them loyalty ID# unique to them. Then they can utilize it every time they shop/purchase, to accumulate rewards. 

  • Have someone manage your social media every day! When someone subscribes, reply back to them “personally” 1-on-1.

Save To Favorites/Wish List

Consumers hate trying to re-find something. Make it easy for them to come back to your website a few days later to find any SKU they were looking at and liked. Monitor this element of your website every day. When your customers save an item to their wish list, create a 1-1 message to them, personalized with your loyalty program information along with how they can get started and “save today.”


Promote this everywhere with in-store signage. Have kiosks defaulting to the sign-up page where consumers can sign up and save. When they do, offer them an “instant” savings on any purchase today!

Use table top or hang tag promotions that you can customize that says: XX number of reward points on this item. Think about how you customize hang tags for reference, pricing, discounts and more.

Direct Mail

Women love direct mail, especially if there are reward points updates, coupons, discounts and more. When I get these in the mail, I SAVE them and make a note as to when the offer expires to ensure I don’t miss the opportunity to save...
  • Think Macy’s... they do it right and I love that store and their promotions!
  • Think Grocery... food is basically a commodity item, yet I have a favorite store where I shop...why? The offers, the discounts on other non-food items and of course... the rewards.
  • Zappos... need I say more?
  • Email Marketing
  • Email marketing yields an average 4,300% return on investment for businesses in the United States. (Direct Marketing Association)
  • Companies using email to nurture leads generate 50% more sales-ready leads at 33% lower cost. And nurtured leads, on average, produce a 20% increase in sales opportunities compared to non-nurtured leads. (Hubspot)

On-Line Advertising

Be different; promote your loyalty, rewards and VIP status for customers that sign up. Again, think about how YOU shop and what gets you to “click through and LEARN more”.

Social Media

This is not rocket science. Consumers embrace social media because they want to be engaged with and by friends, the news, and by companies that they LIKE or are inspired by. Again, think about how YOU engage with your favorite social media platforms and tailor those inspirations with your store or brand’s loyalty marketing platform.

In summary, the benefits for retailers and manufacturers of becoming more focused on consumer behavior in their go-to-market strategies is huge. Brands that adopt programs such as these, increase store/brand visits, engage more customers and do more business. That’s a fact I hope more of you will embrace as we move into 2016.

About Erika Sparrow: Erika is the VP of Sales for Imagine Advertising. She has worked in the Furniture, Flooring, Mattress and RTO industry for over 15 years.
She has a passion for this industry, having worked with thousands of retailers, and hundreds of brands, helping them with their marketing and advertising strategies to increase sales velocity. From a one-store operation to a large regional with hundreds of stores, Erika has been successful by helping them manage their marketing strategies; through integrating the web and omni-channel marketing with traditional media. She can be reached at erika@imagineadv.com or (509) 220-9694.

Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada.  In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact editor@furninfo.com.