How to Earn, Keep & Improve Customer Loyalty

The value of a loyalty program has caused some great debates amongst marketers and retailers. After all, the traditional paper and plastic loyalty programs ran into a series of problems while also bringing about the question as to whether loyalty programs could actually make customers loyal at all.

With the emergence of new digital shopping trends, loyalty has made a comeback with mobile at its side as a top way for retailers to drive in-store traffic and differentiate their physical stores.

In the past, many customers have been confused by loyalty programs, with 81 percent of members saying that they didn’t understand a program’s benefits or how/when they will receive rewards. (ACI Worldwide Study) The real-time aspect of mobile loyalty programs helps overcome this by constantly showing customers how their loyalty is affecting the bottom line.

Mobile loyalty also acts as a way for retailers to incentivize their program through relevant, achievable rewards. To no surprise, the best incentives are still the 100 percent free products, which we have found drive an impressive 74 percent redemption rate.

Mobile loyalty should be thought of as a data driven marketing medium for retailers to get to know their customers and engage in ongoing conversations. This aspect creates a chance for couponing and rewards to be smart, based on consumer profile information as well as purchasing habits. Using loyalty coupons that translate into the currency of what customers are buying will ensure that customers actually feel rewarded for their brand loyalty. 

Loyalty as a Marketing Medium

Previously, many retailers have thought that a loyalty solution “ended”, when their customers signed up for it. For example, 85 percent of loyalty program members haven’t heard a single word from the provider, since the day they signed up. (Colloquy, Research) This “one off” approach no longer suffices, because mobile is about a two-way channel for retailers to interact with their customers. The conversation between the retailer and the customer needs to be kept up over time. Retailers can achieve this through using additional mobile features that add to the entire customer journey.

Do keep the conversation going, with targeted couponing and by including other useful information like updates about new products and special offers, adding a product catalogue, and including essential information about the store such as parking and transportation access. This will show your customer how your loyalty solution is making their customer journey simpler in more ways than one.

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The results

By creating a successful loyalty program that drives consumer adoption, retailers will gain a marketing tool to better control the customer experience, and there are some impressive results. According to our customer data, loyalty members spend an average of 32.4 percent more than non-members, making up about 18 percent of total spending in-store.

Moving Forward

Building loyalty amongst customers has always been about creating emotional relationships that extend beyond the transaction. Mobile shopping is a new way of enriching the customer’s journey to ensure that each and every visitor has a positive brand experience; which is at the heart of customer loyalty. 

In these modern mobile times, retailers should realize that rewards programs are not the only way to build customer loyalty. To some degree, all mobile shopping solutions should be aimed at increasing customer loyalty, whether by increasing brand awareness or by improving the level of convenience. For example, if a retailer’s biggest problem is in-store waiting times, then mobile payments and ordering would be their key to increasing customer loyalty. If customers aren’t even going to make it to the point of sale because of serious pain points in the in-store shopping experience, then rewarding them with loyalty points seems irrelevant to the real issue.

Once an engaging loyalty program has been executed, the conversation should continue moving forward to discussions that involve new features and better payment options. The end result will then be a full shopping wallet that layers all of your value added services together in one easy to use application.

About the Author

Jérémie Leroyer is the CEO of AIRTAG, the mobile shopping ecosystems startup. AIRTAG’s sweet spot is end to end Mobile Shopping Solutions including in-store devices and secure mobile wallets that deliver an interactive and engaging user experience. Find out more at www.airtag.comand keep up with the latest AIRTAG news on Twitter by following @airtag.