Nearly every major brand on the market today offers a loyalty program. Research suggests that almost half of all consumers possess between two and four loyalty cards, with a quarter of consumers owning between five and nine cards. A staggering 90% of consumers participate in some sort of loyalty program.
So, the data suggests that consumers like loyalty programs. And why wouldn’t they? It’s a great way for them to get rewarded for purchases they would likely make anyway. For brands, it offers a gold mine of consumer behavior data so that they can track purchase patterns. These patterns help brands understand their customers and what they want—once they understand that it’s all about designing a program with rewards that get those consumers to shop and buy more.
Did you know that Amazon Prime members spend, on average, 4x the amount of non-members? We’re willing to bet most brands would love to design loyalty programs that yield members to quadruple their spending. Though those kinds of returns can’t be guaranteed (rats!), there are things brands can do to tap into the enormous potential of using a loyalty and rewards program.
Loyalty Programs—Equal Parts Science and Art
Building a great loyalty program is truly a mix of science and art; the science of tracking purchasing behavior and the art of designing rewards and programs that incite action. There are more options than ever for designing a brand-activating loyalty program.
Consumers want loyalty programs that are easy. The more work they have to do to participate, the less likely they are to opt-in. That’s where mobile is a big boon for loyalty marketers. We might leave our houses without our loyalty card to XYZ store, but we never leave our mobile phone behind. (Well, when we do it makes for a really rotten day).
Enter the Mobile Solution
For brands, building a loyalty program around a mobile app allows for a whole new world of possibilities for offers. According to this 2016 Mobile Consumer Report, 77% of smartphone owners claim that mobile offers have a positive impact on their brand loyalty.
But where mobile apps really sing is in their options for payments. As marketers and brands well know, the point of purchase is the most crucial, and sometimes precarious, stop in the customer journey. Just think about the ecommerce pickle of abandoned shopping carts. Mobile apps allow for a seamless path towards transaction. Starbucks My Rewards Program is a very successful example of this phenomena—pay right from that app.
In addition, mobile apps allow brands to put the means of purchase in the context of all the other things that people love about the brand. They make it easy to announce and redeem special time-sensitive discounts on new products or specific product categories. It also provides a holistic solution that includes location finders, product/menu descriptions, online ordering, gift card ordering, and more.
But, it’s not always feasible for brands to build an entire app that includes a mobile payment option—not all brands sell their products in their own bricks-and-mortar locations. Again, mobile may have a solution for this—enter digital wallets. Digital Wallets popularity will increase the opportunities for brands to partner with payment processors to track purchases and design rewards and loyalty programs.
Making Loyalty Marketing Programs Work for Your Business
Bottom line, it’s an era of innovation for loyalty marketing programs. Brands have more options than ever for how to deliver brand-activating rewards programs. But, amongst all that choice can also mean a lot of confusion about what’s best for your brand and your customers.