When it comes to customer loyalty, both grocers and wholesale food suppliers have it tough. There’s the meteoric rise of online mega-suppliers and competition from niche grocers. And there is a new kind of buyer – in retail and wholesale alike – who demands a more personalized, informed, and engaging customer experience. Luckily, Vice President of Marketing and Creative Services Nichole Gunn shed light on how grocers and wholesale food suppliers can build customer loyalty in an article in Progressive Grocer.
How Retail Grocers Can Build Customer Loyalty
So how can grocers build customer loyalty in the face of these issues? Beyond providing quality products and exceptional service, Nichole Gunn recommends that grocery retailers invest in a customer loyalty program.
“According to a 2016 study by The Nielsen Co., 34% of American shoppers choose their favorite grocery store or primary retailer based on the company’s loyalty program. And these customer loyalty programs have come a long way since the days of Green Stamps. Today, reward program catalogs are digital. Point tracking and reward fulfillment are automated.”
When designing a customer loyalty program, Nichole Gunn suggests that grocers focus on providing these 4 things:
- An easily communicated value proposition.
- Online platforms for keeping customers engaged.
- New channels – and a compelling reason – for communicating with customers.
- Tools to collect customer data and analytics to personalize their value offering.
Do These Principles Apply to Customer Loyalty Programs for Wholesale Food Suppliers?
Before exploring each of these principles more in-depth, we don’t want our wholesale food suppliers feeling left out. While these same principles are equally applicable to wholesale food suppliers, it’s important to keep in mind a few key differences for customer loyalty programs in wholesale. One, wholesalers sell through a channel, which requires more robust channel incentive technology, integrations, and data collection and verification tools.
Two, wholesalers are generally selling into a smaller customer base that spend more money. This means customer loyalty programs for wholesale food suppliers requires more personalization and higher value reward-earning opportunities, such as incentive travel. For more information on the differences between B2B and B2C customer loyalty programs, check out this blog!
Understanding the New Customer
When it comes to designing an effective customer loyalty program, it’s important for retail grocers and wholesale food suppliers to understand that today’s customer is a little different.
“For the new customer, value is about more than just price and convenience. Today’s customers expect personalization, engagement, and technologically and emotionally connected experiences.”
An effective customer loyalty program will be designed to appeal to these factors – whether it’s an in-store shopper or a bulk business buyer.
Using Customer Loyalty Programs to Convey an Easily Communicated Value Proposition
How are customer loyalty programs any different from discounts and coupons? The secret is the psychological effect of noncash rewards:
"The idea that noncash rewards can influence buyer behavior may seem overly simplistic, but there’s a reason that prizes, promotions and rewards have been a mainstay of American loyalty marketing over the past century. Studies in behavioral economics have shown that noncash rewards produce impactful, long-lasting changes in behavior at three times the effectiveness of monetary incentives such as cash back or discounts.”
This makes customer loyalty programs a more margin-friendly and scalable loyalty solution than cash discounts. Furthermore, people understand rewards. It doesn’t take much effort to use rewards to boost your marketing efforts. The case studies speak for themselves.
Connecting with Customers Online
Moreover, modern customer loyalty programs include digital hubs where customers can connect online. To quote Nichole:
“The ability to earn exciting rewards will inspire customers to visit your loyalty program website, which can exist as a stand-alone digital hub, a mobile app or as an integrated part of your customer website. This gives you a platform to share more about what makes you unique, in a space where customers are already being rewarded for interacting with your brand.”
This is especially important for wholesale food suppliers, who often struggle to personalize their relationships or establish consistent communications with partners in their supply chain.
Collecting Relevant Customer Data
The more you know about your customers, the more you can enable their buyers’ journey and personalize your value offering. This is an important benefit of a customer loyalty program or retail grocers and wholesale food suppliers alike. Custom registrations forms, customer surveys, and, for wholesalers, sales claims submission tools, provide an absolute wealth of customer data.
Improving Communication Across Every Channel
With rich data and reward-earning opportunities, customer loyalty programs empower grocers and wholesaler food suppliers to craft compelling communications to their customers. Customer loyalty programs open up new channels of communication that grocers might not otherwise have access to. These include email, SMS, push notifications, and loyalty program website content. Incentive-based marketing greatly increases engagement for loyalty program-related communications.
Closing Thoughts for Customer Loyalty Programs for Grocers and Wholesale Food Suppliers
In closing, I’d like to share one more quote from Nichole Gunn, who said it so eloquently in her article in Progressive Grocer:
“In short, loyalty programs offer grocers the ability to surround buyers with an ecosystem of rewarding brand interactions and to enable customer retention in a way that’s scalable and margin-friendly…Rewards pique customer interest and reinforce desired behaviors along the way, but the real benefits of a loyalty program are realized when you take that initial engagement and use it to personalize relationships with your shoppers through your loyalty program”