In business, loyalty pays off. In fact, research shows that repeat customers spend 33% more than new customers, which means the majority of your profits are coming from people who are loyal to your organization.

Customer loyalty is a customer's willingness to buy from or work with a company again and again. It's a motivating factor that compels people to commit to a brand, and it comes from offering customers something extra aside from the product/service they purchased. This provides added value which leaves people feeling happy and satisfied with their customer experience.

When you implement structure to this added value, you create a customer loyalty program. This service helps your company retain customers and keeps them routinely engaged with your content. Even better, when it's integrated into your point of sale (POS) software, these programs become extremely easy to implement and they generate long-term returns for your business.

In this post, we'll explain some of the ways you can use a POS system to support your customer loyalty program.

How POS Systems Support Customer Loyalty Programs

1. Data Storage

To run a successful customer loyalty program, you'll need some kind of software to track your customers' activity and the rewards that they accrue. Having this function built right into your POS software creates convenience and ease-of-use for your team.

At its core, a POS system is more than just the machine that you use for checkout. A good POS system centralizes multiple sources of data to make life easier for store owners. For example, your POS system is directly tied to your inventory, which adjusts stock based on what items make it to the checkout counter. It also keeps a record of your sales, gross profit, and some even have a built-in CRM baked right in.

This makes it perfect for a customer loyalty program, since you'll be able to keep track of your customer's transaction history and how much they have spent with you overall. Your team can quickly spot your most loyal customers and reach out with incentives that you'll give in exchange for brand advocacy.

2. Points System

Most customer loyalty programs involve a points-system, where the more a customer does business with you, the more points they earn. These points are then cashed in for different products/services that you offer. This can be anything like a premium discount, promotional items, or even complimentary service.

With a loyalty program, your POS software can easily figure out what products/services your customer has paid for, and assign a set number of "loyalty points" that they can accrue over time. Once they have enough points, you can either offer them rewards based on their amount, or let them choose what they would like to spend those points on. You can even personalize the offers based on the data you've gathered on them in your CRM. When a customer redeems their points, your POS software will make note of it and process these orders as necessary.

3. Automation

POS systems put all of your information in one location and will update your data automatically. For example, if an online customer chooses a reward that you only offer in-stores, the system can adjust your inventory accordingly while taking care of all other procedures. You'll easily know what items have been used in your loyalty program, how popular it is, and which of your customers engage with you the most.

This provides a veritable goldmine for your business if you have a good loyalty program in place. Customers will come back to your company if your program actively tracks their transaction history and offer rewards that are undisputedly recognized as valued products/services.

4. Reporting

Your POS software can do more than just be a hosting spot for your customer loyalty program – it can also help you measure just how well the program is doing. Since sales and customer data passes through it, you should be able to easily gauge the effectiveness of your program through a few metrics.

Keeping a record of how many rewards were processed and what items were most popular gives you a good idea of how well your program is working. You can also analyze individual and combined customer spending to see how things are looking after your customers enroll in the system.

Best of all, since the system is tracking everything, you won't have to worry about keeping a separate record for your loyalty program, and you'll be able to make every customer feel special with it, providing them with a positive customer experience.

For more customer loyalty insights, read about the difference between customer satisfaction and customer loyalty.