Home Improvement Customer Loyalty: A Vital Tool

by | Aug 30, 2016 | Customer Loyalty, eCommerce | 0 comments

Home improvement customer loyalty programs generally aren’t as famous as, say, frequent flier programs, but they’re integral to their industry nonetheless. While not all hardware and garden stores have them, loyalty programs have a huge effect on the length of the buying cycle and brand perception. Let’s take a closer look…

Shortening the Buying Cycle

The buying cycle in the case of many home improvement goods is long, but the industry has to do a little introspection. Everywhere we turn, there is an incentive to become a loyal customer. From buying groceries at the supermarket to car rentals, hotels, coffee shops and everything else in between, consumers are continuously incentivized to return. What is the home improvement industry doing in this regard? Barring a few exceptions, the answer is not much. They are living with a defeatist attitude that customers are not going to return for a repeat purchase. Of course they won’t, if you aren’t giving them any reason to come back! Home improvement customer loyalty, then, should be newly considered.

This is where loyalty programs can prove effective in shortening the buying cycle. Retailers who sell big ticket items like furniture or expensive power tools can adapt a home improvement customer loyalty program. You can try the traditional rewards model where the customer accumulates points at the time of purchase to be used for additional purchases in the future. You can see them almost everywhere.

The VIP model runs on membership basis where customers have to pay so that they can enjoy the benefits of being a VIP. The most striking example of this is Costco’s Executive Membership Program. Under this program, Executive Members get 2% reward up to $750 on Costco merchandise purchases. The customers have to pay around $110 (including all taxes) to become a member.  

Now, which approach works better? The simple answer is it depends upon your store and what exactly your product range is. More than that it depends upon how you implement it and creatively tweak the program as per the market and your business requirement. You can run a traditional loyalty program by offering various levels of in-store credit for the customer’s purchase. In short, it works on the principle of direct proportionality- the more you spend, the more will you get. You can have a one month waiting period for point redemption and a limit on the amount of credit used for redemption. It will ensure the success of the program. And you will see the change. You will know that even customers of costly items do return for an additional purchase in 30 days!

Differentiation:

Realistically speaking, it’s not that easy to survive and thrive in business which is marred by acute competition. The competition has become even deep due to giants like Amazon who are slowly making their mark in the home improvement products. Thus, if your store is offering same products and services with same prices, there isn’t much which will differentiate your store from your competitors. This lacuna can be efficiently and wisely overcome by utilizing loyalty programs creatively.  Let’s pause here and reflect!

You will be providing the same French windows, roofs, gardening equipment, and artifacts. Unless and until you have a real magical product, your customers won’t have a spiritual need to knock on your store’s door.  Apart from the discounts, the only thing which may become a real crowd puller is the warmth and treatment which you give to your customers. Being in the home improvement industry, you are selling a product which people can buy out of desire or feeling and not just out of sheer necessity. Garden tools or bird and wildlife supplies are definitely not basic human needs. But they are more according to customers’ inclination towards hobby and hobby and heart go hand in hand. This is where the sentimentality comes!

And nothing is better than loyalty programs that tap that sentimentality by surprising and delighting customers by rewarding them for something that previously went unnoticed by many stores. Rewarding them intelligently for their acts like sign-ups, referrals, and purchases, you are surely going to touch their emotional and aspirational cords. Providing your customers free or subsidized interior tips, gifting them tiles or tool boxes on their special days…or even a handwritten thank you note will do.

Home improvement customer loyalty programs are also a good place just to keep helpful information, like the exact shade of paint that the customer bought last time, or a suggestion for the right kind of batteries to go in that cordless drill. Those gestures work more efficiently than you think. It’s a beginning of an emotional connection. And it lasts long!

 

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