Customer loyalty programs form a key pillar of most retailers’ go-to-market strategy, but traditional points-based rewards systems are struggling to deliver strong returns on investment in a saturated loyalty environment.
Customers are experiencing loyalty fatigue and the secondary processes required to swipe cards or scan QR codes at the point of sale create unwelcome friction. In fact, the average consumer belongs to more than 14 loyalty programs but is only active in six or seven of them.
According to Loyalty Now, the solution is a modern, card-linked loyalty program that puts the customer in control.
“When customers bump up against processes that slow down and get in the way of finalising their transaction, they are less likely to participate in loyalty programs. Today’s consumers are quick to switch their loyalties, which means companies don’t have many chances to get it right. Switching to a seamless, card-linked loyalty program could provide the answer,” Loyalty Now CEO, Cary Lockwood said.
Loyalty Now has outlined five key benefits of card-linked loyalty programs:
1. Access to an existing ecosystem of providers
Card-linked loyalty programs plug participants straight into an existing ecosystem of rewards providers. This means customers can choose how they use their rewards, from cashback arrangements to charitable donations. With rewards more closely aligned to customer preferences, merchants tend to see higher levels of participation and retention.
2. Lower cost of entry
Retailers don’t have to bear the burden of creating and managing the loyalty program. Instead, fees are only charged once customers have transacted, which lowers the cost of entry and mitigates the risk of managing loyalty programs. With no technology build required, it’s fast to set up and easy to manage.
3. Access to data in real time
Aggregated customer data is available in real time, which lets merchants see the effect of different offers they make inside the loyalty program. They can then adjust these offers on the fly to increase appeal, improve customer retention, drive individualised or targeted interactions, and manage future marketing and promotion efforts more effectively.
4. A more streamlined process
Because there is no need to use a separate loyalty card or scan a QR code, customers can participate in loyalty programs more easily. By removing this barrier, merchants can gain a higher rate of participation, which adds to the value of the program.
5. The ability to promote the merchant’s brand
By choosing a white-label solution that can be customised for different program operators, retailers and merchants, each business can overlay its own branding onto the rewards program, avoiding confusion for the customer and maintaining a strong brand presence throughout the transaction.
Moving to a card-linked loyalty program lets program operators and merchants transform their points-based rewards systems and attract more customers, deliver a more empowering customer experience, and increase customer loyalty. Because the program is card-linked, it works seamlessly whether the customer is shopping online or in store. There is no need to integrate, adjust or upgrade POS systems, since the program is linked to the card itself and uses the merchant’s existing bank and payment gateway connections to securely capture and process data.