Is your loyalty program falling short of expectations?

The more a customer uses their loyalty card, the more inclined they are to return and make additional purchases. Moreover, a loyalty cardholder tends to be more satisfied and loyal to the brand. Customers who frequently take advantage of their benefits are also more likely to recommend your brand.

This creates a positive feedback loop, turning these customers into brand ambassadors.

These insights come from the latest 2019 Customer Loyalty and Retention Observatory. The survey reveals that 88.3% of respondents rate their satisfaction at 5 out of 7 or higher for a brand where they hold a loyalty card. Loyalty cardholders feel valued by the brand.

1. Loyalty Programs: A Win-Win for Customers

To persuade your customers, ensure all arguments are in your favor. Lengthy forms or excessive personal data requests at the subscription stage can be significant deterrents.

Your sales and checkout teams play a pivotal role. They should be trained to promote your loyalty program effectively: introducing the subscription proposal, highlighting the benefits, addressing concerns, and streamlining the sign-up process. In 85% of cases, customers join loyalty programs based on store personnel recommendations.

Be transparent about the communications customers will receive (SMS, emails) and never mislead them! The loyal customer’s experience post-subscription must align with your promises.

Naturally, the essence of a loyalty card lies in its benefits! What will I earn? What value do I get for sharing my personal information? Popular benefits among customers include exclusive promotions, accumulated points leading to discounts, and vouchers.

Financial discounts are the strongest motivator for customers to visit stores regularly. While exclusive invitations make customers feel special, they aren’t enough to justify sharing personal information.

Before selecting your checkout software, check the loyalty programs it supports.

2. The Shift to Digital Loyalty Programs

In 2019, 53% of people under 36 preferred a physical card when joining a loyalty program. A physical loyalty card fosters a tangible connection with a brand (“I have a loyalty card at…”).

Even though 30.8% of consumers now use their favorite brand’s mobile app for loyalty management, the physical card is still relevant. It symbolizes recognition and sometimes status (like Gold or Platinum airline loyalty cards granting VIP lounge access).

However, the shift towards digitization is gaining momentum. The benefits are numerous: no card to carry around or search for at checkout. Customers receive notifications of exclusive discounts via email or SMS, motivating their store visits. They earn points simply by providing their name, phone number, or email at checkout.

To persuade your customers, offer them immediate benefits (especially financial) upon subscribing to your program.

Paid cards are especially common in stores selling children’s items, where purchase frequency is high. As children grow, their needs are constant. Therefore, it’s crucial to tailor your loyalty program to fit your business model.

3. Paid Card / Free Card: Each Business Has Its Own Practice

The paid loyalty card, as its name suggests, is a card sold to the customer, usually in the form of an annual subscription or sometimes as a one-time payment. The cost of the card is also the primary reason for its refusal. A holder of a paid loyalty card makes a considered choice, in which emotions or the reluctance to say no to your staff’s proposal have less impact on the decision. They invest an amount and hope to gain exclusive and different benefits from it. Unlike a holder of a free card, the consumer’s loyalty will be stronger, as they are motivated to get a return on their decision.

4. Be Careful with Personal Data!

Fears of excessive solicitations (73% of those under 36 fear getting too many emails) and concerns about personal data being hacked or stolen mean that transparency in your data protection policy is crucial. The GDPR mandates that companies:

• Collect only necessary data, justifying requests like a customer’s date of birth and obtaining their consent.
• Inform consumers about how their data will be used.
• Notify consumers of their right to be forgotten: merchants must be able to delete or anonymize all data related to a customer (purchases, average baskets, etc. for statistical purposes).
• Implement robust security measures for their information systems, including software and hosting.
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