Retailers and hospitality businesses should be offering their customers a rewards program for two fundamental reasons: firstly, consumers want recognition from the businesses they buy from, and secondly, there is a richness of data that organisations can tap into if they offer such initiatives.
Today’s consumers are barterers and are increasingly keen for something in return for their custom, while organisations are frantically looking for ways to get closer to their audience. Put simply, a rewards program solves these key issues related to modern-day consumer-focused industries.
Reward Customers in the Right Way
The iVend Loyalty solution integrates seamlessly with your wider retail management suite
Anecdotal evidence suggests the younger generation of consumers coming through – the millennials and Generation Z, if you want to attach labels to them – understand their personal data and their willingness to spend with a company has value.
There has been heaps of research showing the sassiness of the new-age shopper – if the product or service doesn’t live up to expectations, they’re only too happy to tell everyone about it on social media and other platforms. And this customer expectation around how retailers should treat them has implications in rewards program sense, too.
Recent Forrester research not only suggests nearly half of US online 18–35-year-olds think these programs influence what they buy and how much they spend, it also says 80% of loyalty program members want to receive special treatment not available to other customers.
Data is in demand across the retail and hospitality sectors, with businesses ranging from the online pure-play variety, such as eBay and Asos, to the ageing retailers like Marks & Spencer and Macy’s recruiting heavily in the data science space.
The rewards program, if implemented correctly, can be the source of much of the data that these ‘scientists’ are looking to crunch in order to create better customer communication and improve business operations based on actual facts and shopper behaviour.
Over the years, noteworthy purveyors of this approach have been Tesco in the UK with its well-used Clubcard, and Starbucks with its rewards scheme that is used by more than 15 million people in the US alone.
Rewards Schemes Reinvented
As my esteemed colleague Kamal Karmakar blogged recently, what today’s consumers are looking for from a rewards program or loyalty scheme is different to years gone by.
Referencing research from professional services firm Deloitte in his copy, he indicates that although 54% of the 2,000 consumers who answered the survey claim they like points-based loyalty schemes, less than half of consumers always redeem all their points. Deloitte argues that popular loyalty schemes of recent years were designed for previous generations, but times have changed, and they must now serve new purposes.
Now, brand loyalty is said to be driven more by customer service, convenience, and the overall shopping experience than the loyalty scheme itself, so any rewards program that is going to have resonance today must play up to these consumer desires and provide the whole package. That finding chimes with the Forrester stats, too.
If these goals can be achieved it will tick the two key boxes for retailers. They’ll be delivering customer satisfaction while also ensuring there is a continued flow of insightful data moving through their business, which can be used for cementing these consumer relationships yet further.