Why Loyalty Programs Fail (and What Works for Liquor Stores)

Many businesses have some form of customer loyalty — but is it really helping them? 

It depends. 

When a loyalty program is treated like an afterthought by liquor store management, customers will treat it the same way. Now more than ever, it’s crucial to make your store stand out from the competition — and a well-run liquor store loyalty program could be just the advantage you’re looking for.

Here’s the good news: You don’t need to be a marketing expert or use expensive software to run a great loyalty program. By making a few tweaks to your point of sale (POS) system’s built-in membership options and doing a few simple tasks regularly, you can turn an underperforming loyalty program into a popular selling point for your store.

Liquor Store Loyalty Overview: Why It Matters

Many small liquor store owners wonder if running a loyalty program is worth the effort. The answer is a resounding “yes!”. Here are a few statistics that show why:

• Customer loyalty programs help businesses retain customers, and repeat customers tend to spend more than new ones.
• Over 90% of companies have some sort of loyalty program — in other words, you’ll stand out (in a bad way) if you don’t.
• Almost 75% of consumers are more loyal to a brand when they have a positive experience with their loyalty program.
• 25 to 44 year olds are more likely to choose to shop with businesses where they’ve already signed up for a loyalty program. 
• 50% of customers said they’re more likely to feel positively towards businesses that offer a loyalty program.
• One in three customers says they’re more likely to engage with a loyalty program during an economic downturn. 

Long story short, running a loyalty program is a proven and effective way to boost sales and retain customers. If you’ve been thinking about rolling out a loyalty program for the first time or giving your existing program a facelift, now’s the time!

Top Pitfalls for Liquor Store Loyalty Programs

These days, the vast majority of small businesses have a loyalty program — but simply having a loyalty program isn’t a guarantee of success.

Here are some common pitfalls liquor store owners run into when running loyalty programs:

• Complex and manual reward tracking: Managing loyalty programs manually or on a separate system can make tracking customers and rewards more trouble than it's worth.
• Unclear rewards: If customers don’t know what the perks of your loyalty program are, they won’t be inclined to actually use it.
• Not personal: Increasingly, customers expect brands to engage with them in a way that’s meaningful to their tastes — generic offers aren’t enough.
• Low engagement: Stores need to find ways to continuously engage with customers to keep their brand top of mind. 

If any of these problems sound familiar, don’t worry — with the right tools and a change in mindset, you can transform your loyalty program into a powerful marketing tool. 

How To Make Your Liquor Store Loyalty Program a Hit With Customers

In addition to a great selection and excellent customer service, a well-managed loyalty program can be the deciding factor for customers when choosing one store.

Here are a few ways you can get the most mileage out of yours.

1. Make Signup a No Brainer

You have a customer rewards program. Excellent. All a customer has to do is sign up to start earning points. Even better. And to sign up, they just need to fill out a paper form or dictate their name, email, address, and phone number to the cashier… 

… and all of a sudden, the excitement the customer felt is gone. A loyalty program should be just as easy to sign up for as it is to use. 

Ideally, use a customer loyalty program that’s integrated directly with your POS system so you can sign up customers right before they pay. Better yet, use a customer-facing display so customers can enter their own contact information to avoid any input errors and speed up the process.

From there, a customer can enter their phone number to bring up their membership. The easier your loyalty program is to sign up for, the more likely they are to give it a try.

2. Advertise Your Liquor Store Loyalty Program

You won’t be able to reap the benefits from even the best-planned loyalty program if no one knows it exists. Marketing your loyalty program is a must to get customers on board.

There are a few ways to go about it:

• Train your staff to ask customers if they’re signed up for your loyalty program during checkout. This is even easier if you prompt them to enter contact information on a customer-facing display. 
• Create signage and place it near checkout and popular sections with the name of your loyalty program and a list of the benefits. 
• Post about your loyalty program on social media, highlighting any member-exclusive benefits or freebies.
• Create a signup bonus to nudge an on-the-fence customer to sign up (e.g. get 500 points for free when you sign up). You could also create a referral program for existing customers.

Generating buzz for your loyalty program is a great way to boost signups, which creates more marketing opportunities.

3. Be Transparent With Rewards (and Don’t Be Stingy)

The top complaint customers typically have about a loyalty program is that it doesn’t do anything. To put that into perspective, 65% of customers say they’d leave a loyalty program if the rewards weren’t worth the effort.

If customers don’t understand how your rewards program works or see that earning a small reward in your loyalty program is going to take too much time and money, they won’t bother.

So, first things first: Make it very clear how your rewards work. If you have a point-based system, explain to customers how many points they earn per dollar spent, and how many points they have to earn for a discount. Also, make sure customers are aware of any member-exclusive perks like access to premium bottles or event invites.

Last, don’t be stingy with rewards. The more generous you are with your rewards, the more customers will be excited to earn them (and therefore, go out of the way to shop at your store and not a competitor). 

But how generous is too generous?

Our recommendation: Use the reports on your POS system to see what an average customer spends per visit and set a reward threshold that is redeemable about every five to seven visits (e.g. if your average transaction volume is about $70 per visit, set your first tier of reward redemption at 350 points).

Here are some tips:

• Create tiered rewards that get progressively better the more customers spend (e.g. get 10% off every 350 points, 18% off every 500 points, and 25% off every 750 points). This encourages customers to save up on points, but gives them the option to “cash out” early.
• Offer bonus points for buying certain items or shopping on certain days of the week to put rewards even more in reach.
• Offer member-exclusive discounts in addition to points, creating both immediate and long-term benefits for membership.
• Let customers know how many points they have and if they have enough points to redeem a discount at checkout — don’t make it the customers’ responsibility to keep track.

Seeing points tick up is fun, and having attainable rewards is an easy way to get customers excited to come into your location.

4. Use Contact Information for Tailored Promotions

Over half of people say they’re more likely to stay loyal to businesses that use personalized offers instead of generic discounts. Creating offers based on customer preferences might seem out of reach to small businesses, but all you need to create personalized deals is:

• A compatible POS system with built-in marketing
• Customers’ contact info

In other words, a customer loyalty program is more than a perk for customers — it’s an invaluable way to collect customer information so you can use it for smarter marketing.

Once customers sign up for your loyalty program, your POS system will track their purchase history automatically. This lets you segment customers for personalized rewards. 

For example:

• Send an announcement of a new craft beer release to any customer who’s bought craft beer in the last two weeks.
• Send an invite to a wine tasting event to customers who bought red wines in the last month.
• Entice customers back into the store with a 5% discount code for anyone who hasn’t been in for over a month.
• Send a list of your current discounts on whiskey to customers who frequently buy it.

In some systems, including Bottle POS, you can create custom tags for items on your inventory management system (e.g. craft beer, Japanese whiskey, French red wine) to make these filters even more specific.

5. Create VIP Tiers for Exclusive Bottles

In addition to popular staples, liquor stores also carry special bottles — whether it’s a rare wine, a premium whiskey, or a hard-to-find spirit. Many independent liquor stores like to keep certain bottles in a private collection to manage high demand, avoid resellers, and sell them to customers who will truly appreciate them.

A customer loyalty program is an easy way to share announcements about exclusive bottles with a select list of customers.

Instead of curating a list by hand, store owners can use their customer loyalty data to only send out announcements of limited-release bottles (e.g. Pappy Van Winkle release, green Chartreuse, etc.) to customers who have over a certain number of loyalty points or customers with a high enough lifetime sales.

Regardless of which method you use, you should advertise it clearly on your signage so customers know what to expect and won’t be surprised if they’re not included in a bottle release.

6. Ensure Loyalty Perks Work Across Sales Channels

Finally, no one wants to use a loyalty program that only works some of the time. Imagine a customer who’s part of your wine club is hosting a big weekend event and wants to cash in points for a wine delivery, but then discovers the rewards only work in store. They’ll either begrudgingly come in to make the purchase at best, or order online with a competitor at worst.

As liquor stores expand to more sales channels like online orders and DoorDash, it’s important to make sure customers don’t have to choose between rewards and convenience. Having a fully-integrated POS system ensures that your loyalty program works the same — no matter where your customers buy from you. 

Integrated loyalty also allows your customers to use their loyalty account at any of your physical locations, making expansion seamless.

Bottle POS: Making It Easy To Connect With Customers

A customer loyalty program is a fun incentive to encourage repeat business and a means to connect directly with your most important customers. Beyond that, it gives you a glimpse into the types of products and specific brands that your most loyal customers love, helping you with sales and merchandise planning.

But if managing a loyalty program is a pain, those benefits go out the window. Industry-specific tools like Bottle POS make it easy to connect with customers with built-in customer loyalty management, compliant text messaging options, and flexible filters for targeted promotions. 

Try out our Build and Price tool to create the perfect system for your needs.