Loyalty is a big part of what keeps your customers coming back and is also a driving force behind increased sales. Even though that’s pretty much common knowledge, figuring out what creates loyalty is somewhat of a mystery – that is, unless you know the habits and behaviors of your customers.

Brick-and-mortar remains relatively healthy among several verticals and still represents the majority of the retail market. And while physical store operators that have been operating for a couple of years tend to be healthy, they may not know specifics about their customers.

However, changes are happening in retail that are similar to what is going on in software, according to Rami Karam in a recent PYMNTS.com interview. The CEO of Thirdshelf, a loyalty marketing software firm, said that people used to buy software upfront, claiming that software in that form was a transaction-oriented business. Then came the advent of service companies, such as Salesforce, and those firms brought on the demand-as-a-service model.

“In retail, a similar shift also has been transpiring, from transactional relationships to relational. The shift has been spurred by online technology and retail channels,” Karam said. The metrics that retailers use to measure their businesses are very much customer-centric, and he added that such metrics span the cost of acquisition, the lifetime value of customers, how many months it takes to pay back on a customer and so on.

So how is this new type of supposed to work and how does it ultimately encourage customer loyalty? According to Karam, the first step is working with merchants and “tagging transactions” — in other words, a customer ID to those transactions.

For customers interacting through social media, like Facebook or Twitter, the merchant has to first create an incentive to get them to sign up and then set up a promotion via a landing page. A customer then interacts, and customer information can be collected, feeding that data back to the merchant. This is then written into the point of sale. Should one of those customers then visit the store, the data can be brought back up again to the merchant, which can then offer additional specific rewards to the customer who had participated in the original promotion.

Software from a variety of providers that allows for the capture of detailed customer data like this is becoming more available now for merchants. Making use of information like this is a great way to gather insights, trends, and make suggestions to your customers, ultimately building loyalty while increasing sales.


If you need assistance processing your store’s payments or are looking for a business partner that works as an educator and an advocate in the sales space, count on National Merchants Association. We Work For You® and we work to help your business be as successful and profitable as it can be.