Should You Start a Loyalty Program or a Buyers Club?

Loyalty System Ecommerce

Today’s retail competition for consumer’s attention is brutal. Everyone is trying to solve real (or perceived) problems with the help of technology, including those related to customer attraction and their loyalty. Businesses are increasingly using the word, “club”. What is a buyers “club” from the retailers’ point of view, and what are the main characteristics of the concept of a “club”? How can software and technology be an integral part of the creation and maintenance of the club? These questions and many more are tackled by First Line Software’s Head of Retail Practice.

Retailers are constantly introducing new ideas to attract audiences outside of price to try to win over consumers and demonstrate their position and value in the market.  The company’s retail stores (brick-and-mortar both online) become a kind of community that in addition to goods or services, give their customers the opportunity to communicate, gain new experiences, which drives more purchases.  Over the past year, the pandemic has brought to the forefront the ease of ordering, speed of delivery, and personalization opportunities in communication.  To remain competitive, businesses need to listen to the needs of their customers and look for tools to build long-term relationships with them.

The difference between a Buyers Club and a Loyalty Program

Loyalty programs and “buyers clubs” are different.  Their terms and mechanics of rewards depend on the products or services of a particular business.  However, the goal of any program is to generate interest in a company, create awareness in its products or services, retain customers, and stimulate repeat purchases.  So why consider a Buyers Club and not a traditional Loyalty Program? 

A Loyalty Program’s objectives are: customer retention:

  • provide customers with a fixed discount 
  • accrue points for a purchase 
  • provide access to early sales

The task of a Buyers Club is to: attract and retain a customer: 

  • Provide thematically useful and interesting content to a wide range of consumers 
  • Create a target audience on various topics related to the product/service of the retailer 
  • Retain loyal customers through content and social components and, as a result, increase the average sales receipt 
  • Increase supplier loyalty through additional advertising opportunities in the buyers’ club 
  • Attract potential buyers through useful content 
  • Offer interactions with partners (additional advertising platforms, promotions to a wider target audience)

The buyers club format is both a business model and an ideological component of a retailer’s reputation.  The key thing here is the “club” – a community organized around shared interests while giving unlimited access to benefits and buying privileges. Everyone is connected with common goals in mind.  All club structures are based on this and are most successful when the retailers include the feedback of the buyers.

Starting a Buyers Club

The major component of the buyers club is content.  With strong, relevant content, the retailer solves issues of image and builds trust in its brands that are represented in retail chains.  Popular eCommerce and retail topics include culinary associations, parent clubs, animal lovers, sommeliers, and wellness industry fans.  Customers can see content that is useful to them, because the club provides the informal communications channels on the relevant topic.  The retailer knows the interests of the club members through their collected data and can serve these interests by providing useful advice, recipes, analytics, etc.

Therefore, it’s critical to prepare the IT infrastructure for receiving and processing this data within the buyers club.  To do this, it is necessary to integrate your billing and cash systems on the same platform on which the club will be implemented.  Make sure you have everything you need to process your data and that it’s as easy as possible for the consumer to make a purchase.

This is where the “customer journey” begins and the club ideally becomes the first stage of interaction between the retailer and customer.  Platform solutions exist that connect and provide opportunities for audience segmentation in various slices, personalization, targeting offers, as well as automation of communications (Optimizely, The Progress® Sitefinity, Kentico, etc.).  These platforms create favorable conditions for building mutually beneficial relationships between the business and its customers; such as content management and provisions for additional benefits to club members.  It also helps to adjust the content in relation to the implementation plan – what needs to be sold as soon as possible or to increase demand for a group of products.

Thus, the retailer builds the loyalty of a group of buyers, and moreover, acquires loyalty on the side of the supplier of goods.  It shows that there is traffic in this group by the number of visitors and provides additional sales through promotions for club members, which is beneficial for suppliers as well.  As a result, the retailer and the supplier increase the turnover of goods, the buyer gets the best and most favorable price for the goods, and this success is due to useful and relevant content posted in the online club.

There are cases when a retailer builds a whole community based on a buyers club.  Due to the inherent socialization when like-minded people meet in a club, there is a personal connection between members of the community – it’s called, “binding”.  In addition, visitors come to clubs on a regular basis, so advertising that appears there either in the form of banners or in the form of cross-links work much more efficiently and is not so intrusive. Every day there should be something new.  To foster this, some clubs resort to partnerships like points programs with grocery chains or other retailers.  Club members can equally earn and spend bonuses in different networks fostering enhanced cross-pollinating business opportunities.

Choosing an IT partner to implement a Buyers Club solution

An integrator for the development and implementation of a buyers’ club comes with a team of experts who deploy a technological solution based on the needs of the business.  In the process of choosing an integrator, you need to make sure that they already have the experience in implementing similar projects.  They will be able to take into account the specifics of your market and offer you the most relevant solution.  Keep in mind that no matter what type of buyers club you develop, over time it will need to transform and adapt in order to keep up with the needs of an ever evolving, and demanding consumer marketplace.

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