How will an effective loyalty and reward scheme help businesses get back on their feet post-COVID?
Intro: The Playing Field
We have all seen the news detailing the industries affected most by COVID: Hairdressers, nail bars, hotels, airlines and independent brick and mortar retailers; the list grows. However, arguably the hardest hit industry of all are high street food and coffee retailers with a significant city footprint, reliant as they are on office-based footfall and high volumes. Our cities are largely empty, and it remains to be seen how the workplace will re-emerge as we go through this pandemic, with evidence showing that profit margin and business for investment banks, insurance, legal firms etc. remain much the same. Why then, post-COVID, pay massive sums for real estate to house all the employees as before, when they have delivered the same results working remotely?
That said, people will come back. Just not as often as they did before. There are numerous examples of big businesses committing to a remote-working strategy going forward. City centre retailers rely on the physical presence of the office, and the regularity of people within it. Therefore, if people and footfall are reduced, and there is little the food and beverage outlet can do about it, what else can you target as a metric to improve sales? Spend per head is the key, and an effective, easy to use loyalty system that rewards customers is the way to increase it:
Average transactions values have been shown to increase by 13% when accompanied by a loyalty scheme
83% of UK consumers say they are part of at least one loyalty scheme – YouGov
86% of consumers are open to suppliers monitoring their activity if it leads to better tailored rewards
Loyalty: How to make it work
The above shows people are prepared to engage with a loyalty scheme if it rewards them, and that increased average transaction is the key to increasing spend per head. People will spend more when rewarded; who would have thought it?! Often, retailers think running a scheme is too much hassle, too intrusive and cumbersome. But, if you offer something, you may be surprised how many ‘barriers to entry’ are hurdled in the hunt for a freebie. In addition, a few other changes brought about by COVID should play in favour of a city-based retailer:
- Having travelled to the office, people will be inclined to ‘pop out’ to the high street for a bite post-COVID if they are incentivised. Employees may be less inclined to visit on impulse as minimising risk is also a factor, but when offered tailored rewards they will be prepared to mitigate this, as risk becomes less of a factor with vaccine rollout.
- Novelty factor: Once in the city, people will indulge more, as a break from the drudgery of making lunch at home every day. Why not treat yourself, and earn points while at it?
- Days in the office will be more planned: Meetings, catch-ups in person, these are all valued more having faced what we have. People will make more of their time, and will be inclined to plan in their breaks, and potentially what they do with their rewards during them.
Loyalty and reward schemes are plentiful in the market. At BlueRunner, we have developed an easy-to-use, attractive digital app to do just that. Interested? Let us know, and get on with increasing that customer spend and bouncing back from COVID.