Scanning Solutions Crucial to Success of Customer Loyalty Programs
Most of us have a few retail loyalty program cards in our wallets. It’s a great concept, one that ideally benefits both customer and retailer. However, keeping track of them and remembering to use them can be challenging.
In the era of Big Data, targeted marketing, and mobile commerce, loyalty programs are long overdue for an upgrade. We’re fast approaching a major shift in shopping, payment, and personal security systems that could mean most consumers stop using physical wallets in favor of the digital wallet on their smartphone. Loyalty programs that require cumbersome registration or physical cards will suffer as mobile technology marches on. In fact, even digital programs are finding it challenging to keep up with consumer preferences.
The average American household is signed up for 29 loyalty programs. According to a recent Colloquy survey, sign-ups jumped more than 25% from 2012 to 2014. This is a promising trend, but more than half of the 3.3 billion memberships are inactive. While truly engaged program members benefit companies through both revenue and relationships, inactive members cost money. Loyalty programs are becoming increasingly complex—some are part of multi-enterprise coalitions (e.g., Plenti), many are attempting to be multichannel (in-store, web, mobile, social media), and most try to track purchases by tying the programs into POS and e-commerce systems. The best in class programs, such as Sephora and Starbucks, are seamlessly integrated with POS and mobile wallets, and offer easy to use, highly rewarding points systems that target promotions to customers based on location and purchasing habits.
It’s clear, both from membership statistics and customer feedback, that loyalty programs in their current state hold enormous untapped potential. Launching a digital loyalty program can be expensive and complex. According to Capgemini’s report Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age, US companies spend $2 billion on loyalty programs each year. Increasing ROI and customer engagement should be a high priority; advancing the technological sophistication and functionality of these programs to keep pace with consumer expectations is job number one.
The most critical first step is to enhance the sign-up process. Most of us don’t want to fill out a form at the checkout counter, but sending a customer out the door with a blank form isn’t likely to work. Many online shoppers will abandon a transaction when presented with a registration form, especially if they have to fill it in using a mobile device. Even when customers do complete forms, that data then has to be entered into a database of some sort, and the entire process is prone to erroneous or incomplete information.
The ideal solution is to streamline, digitize, and integrate the whole process, starting with the first interaction with a potential loyalty member (and their valuable data). By using a scanning solution, a customer service agent can scan the customer’s ID or driver’s license in one simple step. Scanning solutions can be easily integrated with POS systems, so that the data from the ID is automatically converted to searchable text, verified, populated into an appropriate database, and connected with other systems, (e.g., digital wallet, CRM).
Scanning solutions ensure that the data captured is accurate, which benefits every subsequent process. Bypassing manual entry and use of paper forms allows retail employees to focus on the customer. Without any hassle, the customer has become a member and can begin enjoying the perks of the loyalty program. Scanning solutions work for online customers as well, by capturing their ID data via a smartphone or tablet and auto-populating form fields. The more full-featured the POS ecosystem, the more can be done with the customer data captured through scanning. Loyalty programs must differentiate themselves and customize perks they offer to build higher levels of engagement (and, in turn, better ROI). Programs that are strictly transaction-based (X reward for Y dollars spent) don’t usually offer enough value to inspire active participation from members.
Rewarding customers for brand-related social media activity, creating game-based promotions, and providing a unified multi-channel experience are hallmarks of the most successful loyalty programs. Figuring out how to build mobile-centric loyalty programs that are fun and easy to use is paramount. As the Colloquy report points out, the “antidote for sagging engagement” is “vigorous integration of technology and mobile channels.”
Going forward, efficient and accurate data collection, combined with customer ease of use, will be the keys to extracting more value out of loyalty programs. Powered by scanning, POS, and mobile technologies, these programs will create stronger and more dynamic relationships between retail brands and their customers. The benefits of strategic loyalty initiatives will extend far beyond securing repeat customers—everything from store layout to personal data security compliance to brand marketing will be positively transformed by a more intimate connection to your most engaged customers.
Yossi Zekri is the President & CEO of Acuant,
the leading provider of credential management solutions