Tip #252 – Loyalty Programs


Tip #252
Loyalty Programs

I hope most of you are aware that flowerSoft offers several loyalty programs.

As the name implies, loyalty programs are used to reward customers for their loyalty to your shop but in addition, they are meant to generate more frequent purchases from customers.

I know many of you are using the Number of Purchases loyalty program but there are several other programs you may not be familiar with.

These are:

  • Number of purchases program.

    This is by far the most popular loyalty program. Similar to the program you see at many car wash places, the customer makes a pre-determined number of purchases, for example 10, and then gets a reward on the 11th.
    The reward can be a totally free order, as long as it doesn’t exceed the average amount of the previous 10 purchases or a pre-determine Dollar amount, like $25.

    Please note that with this program, if it gives a completely free product amount, once you apply the program will reset itself. So if the customer has spent an average of $75 on product for the previous 10 orders and you apply the discount on an order where he or she only spent $50 on product, they will basically lose the additional $25 they would have been entitled to if they had spent $75 or more. This does not come into effect if the discount is a set amount of money, like $25.

  • Another loyalty program is the Purchasing Level Discounts program. This program is based on the Dollar amount the customer has spent with you during the past 12 months.

     

    This program, although used by some flowerSoft users, is not as popular because you and the customer do not really know how much you are getting off unless you know the purchasing level the customer is at that point.

    This program allows you to define your own discount levels, of course.

  • Another fairly popular loyalty program is the Club Membership program. This loyalty program is similar to programs offered by some book stores.
    With this program, the customer pays a nominal amount to join the club and then they get a percentage off every sale they make.
    With flowerSoft, their membership entitles them to a set discount percent off the product amount on every local order they place, not on outgoing orders for the obvious reason.
    There is no minimum number of purchases and no purchasing level discounts. The discount is applied on every local order the customer places.

    You sell the club membership on a regular local order, like this…

    You can create your own item code for the club membership but the code has to end with the word “CLUB”, for example WHCLUB, MYCLUB, or just plain CLUB and you can add your own item code description and you can charge whatever you want for it.

    As soon as you enter an item code ending in “CLUB” flowerSoft will check the club membership database and if the customer is not already a member of the club, flowerSoft will ask you for the discount %.

    If the customer already belonged to the club, flowerSoft will display this message if you try to sell a membership to the club…

    At this point you have the option of saying “No”, which is the default, and flowerSoft will erase the “CLUB” line or you can answer “Yes” to extend the expiration date of an existing membership that may be about to expire in which case flowerSoft will display this…

    Membership renewals extend the expiration date of the membership by 1 year from the previous expiration date.

    On this and future orders from this customer, when it comes time to pay for the order, flowerSoft will deduct the discount % from the product amount, like this…

    Note that there is no discount off the club membership amount itself.

    Be conscious that if you are entering a wedding or a large party or an invoice for a large amount, if you sell a club membership on the same order the discount will come off that order also.

    In other words, if the order is for $5,000 and on the same order you sell a club membership for a 10% discount for $25, the customer will get $500 off the order for his or her $25.

    This might be a great marketing tool and a way to give a discount that you might have already plan to give and get some money and a possible frequent customer for it.

    Also remember that you can charge anything you want for the membership, $25, $50 or $100 is all up to you.
    If you set the cost of the membership in the item codes database, that will be the price that will come up when you enter the code, but that price can always be changed.

    So this how the club membership loyalty program works.

    The last loyalty program offered by flowerSoft is called a Loyalty Items program.

    This program may be good for you if you only one to give a discount on certain items. Items that you either have too many of or make a large profit from and would be beneficial to sell in volume.

    Loyalty items are available to all your customers. You cannot choose which customers will receive the benefit of the program.

    Also, once the number of purchases for the item is met, the customer will receive the item for free on the next purchase. There is no other discount than 100% off  the item’s price.

    Here is how this program works…

    First you have to specify which items you want to be in the program. You do this by bringing the item up in the item description codes database and indicating that it is a loyalty item.

    You can also create a loyalty item from the ‘Other Loyalty Programs’ menu…

    However, I think it is easier to let flowerSoft add it for you by bringing up the item in the item description codes database and hitting the “L” key.

    When you do that, flowerSoft will ask you how many of the loyalty items need to be purchased before giving away the free one.

    Once the item is set as a loyalty item, flowerSoft will keep track of how many of the item each customer has purchased, how many of the item have been given for free and will inform you when it is time to give their customer their free item.

    If you answer “Yes”, flowerSoft will zero out the Unit $ and Extended amount.

    As a side note, notice that the item code has an exclamation (!) mark in front of it.

    This does not mean that flowerSoft has changed the item code but it is just a flag that flowerSoft uses to let itself know that it should skip over the Unit $ field.

    This is needed tp prevent you or one of your clerks from accidentally overwriting the Unit $ amount.

    Next time you sell the item to the customer, you will notice that flowerSoft has updated the related fields…

    In the event that the customer purchases more than 1 of the item when entitled to 1 of them free, flowerSoft will separate the free item from the other, like this…

    Selling 5 but 1 is free, so when you answer “Yes” flowerSoft will change the order to this…

    Another side note, if this had been an inventory item flowerSoft would still have deducted the correct amount from inventory because it would have removed the exclamation mark from the code before looking it up in the inventory file.

    One of the reason flowerSoft only allows up to 11 characters in the item description code field although there is room for 12, is for cases like this where flowerSoft needs to precede the item code with a symbol and for cases where the UPC code is scanned into the item code field.

    So that is basically how the Loyalty Items program works.

    There are other customer discounts possible with flowerSoft, but they are not loyalty discounts. They are more like permanent or one time discounts.

    Loyalty discounts are used to attempt to generate more sales from a customer and they should be prominently advertised.
    They are of no use if your customers do not know about them.

    If you have any suggestions or comments, please let me know.

     

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