How To Convince Your Merchant IT Clients They Need A Loyalty Solution

By Bernadette Wilson

In this exclusive interview, Amaha Selassie, VP of channel sales for UP Solution, tells Business Solutions how retail IT VARs can explain the ROI of loyalty solutions to their merchant clients, as well as the benefits of adding a gift card program.

BSM: What are the benefits to a merchant of a loyalty solution, and how can retail IT VARs explain ROI to their customers?

Selassie: Implementing a loyalty solution can have a positive financial impact on a business.  Loyalty programs help retain existing customers, acquire new customers, improve the natural churn rate of customers and, promote the sale of higher margin products.

A key factor in the success of a loyalty program is establishing clear objectives. A common objective of retailers is to highlight their best customers. They can then optimize the profit that can be made from them by increasing the period in which they remain customers. To achieve this objective, the retailers must be able to identify their customers, track customer spending, and measure the results.

How can retailers obtain such detailed information? By deploying a cloud-based loyalty program that integrates with a payment terminal or point of sale (POS) solution. The real value of a loyalty program comes from the ability to identify individual customers and measure and understand their purchase history. Once merchants understand their customers, they can develop customized promotions tailored to move each customer type up-segment by rewarding them for their desired behavior. For example, points based on a spending threshold encourages customers who do not spend as much to spend more in order to receive rewards, while rewards based on the number of visits encourages frequent customers to shop more within a set timeframe.

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