Ask any retailer what a Point-of-Sale (POS) system is and they’ll most likely tell you it’s the central component of their business. A combination of software and hardware, your POS system is so much more than a cash register, it’s the main hub where everything comes together! It’s recording every sale, product, and customer transaction, turning it into one of the most valuable business tools: consumer data.

Consumer data is important because it depicts almost an entire demographic of your customers. By keeping track of their buying behaviors, you have insight into who is purchasing, what they’re purchasing, and when they’re purchasing it. But is your system optimized to build long term and profitable relationships? Here’s 5 ways a modern POS system could increase your customer loyalty:

1. Easy sign up

Having a loyalty program that integrates into your POS system plays a key part in program success. What better time for a customer to sign up than when they’re already in the process of making a purchase? Collecting customer information at the POS can be timely and cause unwanted frustration, but the ability to simply scan a driver's license can quickly capture and retain all relevant customer information. This automation saves businesses time and money by eliminating the labor it takes to manually enter customers’ information at the register. Customers will thank you too, since it’ll be saving them valuable time before their next destination.

2. Customer engagement

Not only does a POS serve as a customer’s point of purchase, but it turns into the interface that allows you to track and view customer behavior. When a customer signs up with your program you should have things like their e-mail, phone number, address, birthday, and maybe even social media accounts. Having this stored in your POS database centralizes all your information and keeps it organized for future engagement and segmentation. Connecting and interacting with customers through these mediums can actually foster a great deal of loyalty if kept relevant, informative, and fun. For example, something as simple as a ‘Happy Birthday’ pop-up message on your POS can go a long way. That small recognition at the register could be what connects a customer to your brand!

3. Relevant offers

In today’s digitized society, customers are buying because of a brand’s relevance to their needs in the moment. The reality is that everyone’s needs depend on time and context, and let’s face it, promotions and discounts are crucial to driving sales. Your POS should allow you to target a specific segment of customers and offer them something based on their collective purchase behavior. By segmenting customers you’re avoiding one-size-fits-all loyalty promotions and actually tailoring offers for the things they’re already shopping for. By making your customers’ experience more relevant, it provides a more profitable experience for you. Whether it’s points, a discount or special recognition, give your loyal customers what they want—a rewards program that makes it quick and easy to earn and redeem points for the things they actually care about.

4. Personalized experiences

Your POS system should do many things, but most importantly it should be recording your customer’s behaviors and patterns so you can use that information to create tailored experiences. Upon signing up for your loyalty program, customers are giving you insight into their entire demographic. You know (pretty much) everything about them and with time, you learn their shopping habits. Use this to your advantage when customers reach a reward and add a touch of personalization. When a customer feels they are noticed and appreciated, true loyalty is fostered and more purchases are made. By leveraging this data, retailers can make personalized recommendations that maximize upsell opportunities and promote a sense of brand loyalty.

Does Beth like to have a drink when she checks into the hotel? Have one waiting for her before she arrives. Does Carlos get an oil change every 4,000 miles? Send him a coupon when it’s almost time for his next service. It’s the little things that go a long way when trying to achieve customer loyalty.

5. Instant gratification

Nothing deters people more than signing up for a loyalty program, purchasing something, and realizing they have to wait for a reward to be credited. Don’t make your customers wait, make your rewards instant, or pretty close! Your POS system should be able to automatically apply loyalty discounts and promotions without any hassle. As humans, we desire instant gratification—we like to do something and see the immediate result. The same principle applies to loyalty participants. When customers know they’ll be rewarded for their purchase it becomes an incentive for them to move quicker, especially when it comes to low-risk purchases. Businesses should use this to their advantage so that customers continue to spend more while deepening the engagement they have with your brand. Instant gratification = instant purchases.

Your point of sale system should streamline your workload, prevent loss, and drive sales. Having the right POS solution will not only make your operations more efficient, but it can actually grow your business along with your loyal customer base! If it doesn't, it might be time to look for a new one.

This article was featured in the Loyalty360 October Loyalty Management Online issue. View it here.