Guest Column | November 17, 2013

4 Things Every Successful Loyalty Program Solution Needs

By Russ Harty, SVP Key Accounts and Partner Channel, Merchant Warehouse

Resellers looking to add value for merchants should explore all of the possibilities for loyalty programs brought about by the proliferation of mobile payments and other commerce applications. Merchants value loyalty programs because they allow them to build relationships with customers over time, exchanging valuable data for a better, more personalized customer experience. Consumers value loyalty programs because they are able to get deals, discounts, and offers that they would otherwise miss out on in exchange for visiting their favorite stores. All that’s left is for resellers to identify the right loyalty programs to offer that increase the value for everyone who touches the transaction.

Every successful loyalty program solution needs four main elements:

1. Convenience

Convenience is key for both the merchant and the consumer. Loyalty programs have historically been the pinnacle of inconvenience. Remembering to carry around loyalty cards, stuffing your wallet or keychain with them and sifting through to find the right one … Add it all up, and the loyalty experience to date has been less than stellar. However, mobile has the power to change that. With the best-designed mobile payments and loyalty apps, consumers can use loyalty programs easily — sometimes without even taking their smartphones out of their pockets. Merchants, in turn, can accept them quickly and painlessly using contactless technology or QR code scanners. This kind of convenience can’t be overstated. Avoid any loyalty solutions that add an extra step to the process or require a lengthy sign-in process for merchants or consumers. These are likely to deter anyone from using them.

2. Data Collection and Analytics

Loyalty programs only work if they connect merchants to useful, and not overwhelming, amounts of data. Before you add a loyalty solution to your portfolio of offerings, find out what kind of data collection and analytics functions the app or program offers. Merchants should be able to use loyalty programs to connect customer purchase data and identification information, build a historical profile and analyze trends to optimize their marketing and loyalty efforts. And, that visibility should be across any shopping medium, in-store, online, or mobile. A simple but robust dashboard is vital to helping merchants realize the true benefits of any loyalty solution. And consider your market. If the retailers you work with are primarily small business, be realistic. Small businesses aren’t likely to have the time or resources to train their staff to execute a complex software program. Instead, go for user-friendly, yet powerful, software that offers just enough features without being overwhelming.

3. SKU-Level Tracking

It’s vital for small and large businesses alike to gain insight into purchasing trends by analyzing transactions via SKU-level tracking. A great loyalty program is one which can connect actual inventory to customer analytics so that merchants can determine what is being sold to whom, when, and for how much. This kind of information, over time, can be used to develop sophisticated marketing programs even for small merchants without much time or resources. Additionally, as loyalty programs and mobile payments apps grow increasingly location-aware, it will be vital to have SKU-level data connected to mobile-local search so that people nearby can find what they’re looking for in the real world — without calling around or running in to every store. Connecting SKU data to mobile maps is a great way to drive foot traffic, increase incremental sales, and build loyalty by offering real value to customers.

4. Personalization

It’s vital that loyalty programs don’t take a “one size fits all” approach. Even if a solution is “high tech” and “convenient,” if the loyalty rewards are as off base as the mile of coupons that shoppers often get when they use traditional loyalty cards at the register, then no one will want to use them. Instead, choose loyalty solutions that make it easy to identify and categorize customers so that merchants can offer relevant and timely offers, rather than blanketing them with spammy “rewards” that are unappealing and may actually make the merchant look worse. Personalization is the key for merchants to going from “out of touch” and “self-interested” to a favorite shop deserving of loyalty in the eyes of the consumer. As a reseller, your goal should be to make merchants look as good as possible through successful and relevant loyalty programs.

So there you have it. Four key features to look for when you select loyalty solutions to offer to your customer base. Of course, it’s important to understand the needs of each of your customers individually before recommending a solution to them, but these guidelines should give you a solid baseline for determining what the minimum requirements look like. Offering great loyalty programs that help merchants drive incremental revenue and build profitable customer relationships is win-win because it’s a great way to build a successful business for yourself.