Loyalty is worth its weight in gold — in personal relationships, of course, but also in consumers’ relationships with the retail stores they frequent. Yet “frequency” is only one objective of customer loyalty programs in today’s high-stakes competition for attracting and retaining consumers, as well as getting them to spend more in your store.

As big box operations and e-commerce sites siphon away customers, local retailers must develop next-generation loyalty programs that use in-store data to show customers they understand them and their needs. They must also use digital channels to research, interact with and transact with consumers in deeper, faster, more effective ways.

Retailers must think strategically about loyalty, viewing programs not as isolated campaigns but as the outcome of daily decisions across pricing, promotions, product assortment, space, marketing and store operations.

“Food retailers need to reboot the way they think about loyalty, taking advantage of the latest tools to truly engage shoppers and earn their loyalty across all customer touch points and not merely through a loyalty program,” says Graeme McVie, chief business development officer at Precima Inc., which translates retail customer data into critical insights to align marketing, merchandising and operations strategies with shoppers’ needs.

Effective loyalty programs are grounded in personalized, customer-centric offers and discounts tailored to loyal customers. That translates to higher levels of customer satisfaction, sales and profits. But today, shared data and strategic partnerships are also critical to building customer loyalty.

Here are three strategies savvy retailers are employing when it comes to loyalty programs.

  • Utilizing offer optimization technology to determine the optimal mix of offer types.
  • Working closely with manufacturers and suppliers to ensure that their marketing resources are aligned with loyal shoppers’ needs.
  • Mining loyalty data for use by media partners to create comprehensive marketing content across multiple digital channels and onsite activation. This includes in-store events around culinary, cultural and business pillars.

Customer loyalty programs have just two primary objectives — and two chances to attract and retain the core base: One, to offer customers additional, differentiated value propositions; and two, to provide a means of attaching a customer identifier to customers’ purchases.

The overarching strategy and goals? Build the brand and loyal customer base, and increase sales and profits. It’s as simple as that!