By Alice Kitchener, Loyalty Account Manager at Stream Loyalty
The short answer to this question is yes, the standard loyalty card is becoming increasingly outdated and the future of loyalty must lay in more sophisticated and efficient rewards for customers. But integrating loyalty cards with payment cards is not the best way to win back customers.
The loyalty card has come a long way since its creation in the 19th century where traders would give customers copper tokens that could be redeemed on future purchases. Numerous industries now use loyalty to their advantage with every high street brand using apps or digital loyalty cards to share deals directly with their customers. You can even consolidate all your loyalty cards into one app to store all your favourite brands in one place and expediate transactions so integration of loyalty with payment feels like a natural next step, in fact, this is what several card providers are already doing.
Loyalty is now at a stage where customer expectations are high and the industry is perhaps a little behind the convenience our customers expect in a tech-savvy post-Covid world. For a loyal customer there is nothing more frustrating than not being rewarded because your card is in your other jacket or your phone just died – nothing bugs me more during my weekly shop than realising I don’t have my Clubcard with me! This in itself can turn the customer experience with the brand into a negative one. With convenience being the key driver, it feels inevitable that loyalty and payment not only will be but need to be consolidated.
With this being said, I am not convinced that integrating loyalty with payment cards is the best way to win back customers. Customers leave for numerous reasons and therefore their motivations to return will be different. Convenience and making it easy to earn could certainly be one of these factors and contributes to a well-rounded and good customer experience, but it is not the be all and end all of customer loyalty, particularly if your key drivers are not spend orientated and the goal is to incentivise lapsed customers to return to your business.
Understanding your customer base, the goal of your win back campaign (more sales, new product adoption, brand awareness, etc), the actions required to achieve it and the lapsed customers most likely to complete these is a fundamental starting point for winning customers back. Your campaign should provide relevant offers with achievable outcomes that are relevant to these customers to incentivise them to return to your brand. Investing in good data collection and understanding why customers leave your business is therefore key to encouraging them to return.
Ultimately, we are living in a data-driven tech-enabled world allowing for sophisticated customer targeting and marketing which is why integrating loyalty cards with payment is inevitable, but it isn’t the best way to win back customers.