Customer loyalty is vitally important to businesses of every type and size around the world. Loyalty is both a journey and a destination, where merchants add value to enhance customer experiences in ways that result in deeper engagement, delighted customers and, ultimately, more sales.
From a customer perspective, loyalty is about being recognized and appreciated. Driving customer loyalty starts with knowing where your customers are, even amid an explosion in the number of channels. From a merchant perspective, loyalty is all about data. Merchants succeeding with loyalty are finding ways to activate that data to better understand their customers, driving convenience and connection.
What makes loyalty programs successful?
Loyalty helps businesses differentiate from the competition, forging deeper connections with customers that keep them in your orbit, especially when the costs of switching are low. Loyalty today is less about the economic value of rewards and more about connection and status. Loyalty is more than just what a customer buys – it’s about understanding as much as you can about the customer’s lifestyle and values.
From a data perspective, loyalty is about personalization – when the customer receives an offer for a purchase they’ve been contemplating, they think, “this is exactly what I was looking for.” That personalization adds convenience and value by making the customer’s life easier.
The days of one-size-fits-all offers are over. Driving that sense of loyalty and connection is what’s going to get a customer’s attention. Loyalty programs help merchants foster 1-to-1 relationships, using data to predict the next behavior, the next need and serve that up at the right time and the right place.
Can small businesses benefit from loyalty programs?
Larger merchants are still the leading providers of loyalty programs. While loyalty programs started with large chains, today’s loyalty programs are working for businesses large and small all around the world.
As the technology evolves and becomes more accessible, we’re seeing ample opportunities for smaller merchants to unlock these capabilities. With a trusted partner, smaller merchants can leverage their own data and assets to take advantage of the personalization and individualization that we’re seeing up-market.
Payment partners are leaders in loyalty programs because the core of loyalty programs is based on transaction data. A merchant’s payment partner has the transaction data and knows how to make that data actionable. Payment partners like Worldpay offer loyalty programs that help merchants accelerate into this space and use data, digital platforms and personalization to drive customer loyalty.
The centrality of payments to loyalty programs
Simple steps to improve the payment experience can improve customer loyalty and boost your bottom line.
Payments are at the heart of loyalty programs, starting with convenience. Whatever a merchant can do to make customer interactions easier has tremendous value – often more than the tangible rewards or cost savings that a loyalty program may also deliver. Card on file is one example of something that removes a step and adds convenience to the checkout process.
A more recent innovation is using a customer’s payment card as their loyalty program identifier. Just paying with a known card identifies that customer as a loyalty member. Removing the need to provide a separate loyalty card or ID is a small convenience that has a big impact on customer experiences.
The next wave of loyalty
The next wave of loyalty programs is likely to be seen beyond traditional retail and service industries. The concepts that have propelled loyalty to the forefront of retail are also applicable to everything from B2B to travel, medical and more – understanding the customer, knowing their preferences and how they like to pay.
Loyalty strategies are most relevant to businesses that have low barriers to switching, like restaurants. Merchants need to be thinking about what they can do to make trials easier for the customer while making it harder for customers to switch away from you.
Loyalty programs help merchants grow by forging stronger relationships with existing customers. There’s an opportunity to expand loyalty to wholistic customer engagement and make sure we’re addressing all stage of the customer journey from customer acquisition to retention and then converting them into repeat and more active customers.