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Embedding loyalty into every step of the customer and payments journey
Companies are reinventing loyalty programs as new technologies emerge and customer expectations shift. Those that want to increase customer loyalty should take an integrated approach and explore the role of payments, according to a report from PaymentGenes.
Embedded loyalty is a strategy that incorporates loyalty into every step of the customer journey. It ensures continuous engagement and interaction, unlike traditional programs that work separately from the core customer journey.
The traditional strategy of points-for-purchase is increasingly seen as outdated by companies that use loyalty programs. In fact, a report from Capgemini showed that loyalty programs that focus on personalized experiences result in a 28% higher retention rate.
PaymentGenes points to seamless, effortless, and integrated loyalty programs that bring the payment capability to the forefront in every sale. For example, Starbucks was successful in leveraging payment capabilities like prepaid cards and card-on-file, which elevate the customer experience and provide continuous gratification.
“Within the automotive industry we see a clear trend towards in-car payments, driven by the potential to improve the overall driving experience through convenience and strengthening the role of the OEM in the customer lifecycle,” noted Kirsten Hoornstra, Practice Lead at PaymentGenes.
“Forget the hassle of paying for parking and pay from the comfort of your car. Convenience is giving one of the most valuable gifts of all time: Your customer’s time.”
Some of the trends in embedded loyalty include things like gamification, AI and data analytics, omnichannel experience, and personalized offers. Heightened engagement is the name of the game and organizations will need to identify a smart combination of these elements catered to their business model.
Upgrading loyalty experiences
A number of factors need to be taken into account when an organization looks to upgrade their loyalty program. For example, effective collaboration across departments like marketing, customer service, and IT (“who owns loyalty?”), as new programs will either need to be embedded into the existing IT infrastructure or require an IT upgrade, which can be a major undertaking.
Organizations will also need to integrate fraud detection algorithms and other tech solutions to potential abuse of their loyalty programs. The costs related to upgrading systems and processes needs to be kept in check with smart budgeting.
“At PaymentGenes we see the untapped potential of leveraging payments as an instrument to increase customer loyalty,” said Hoornstra. “To push loyalty triggers and provide the adequate nudges for redemption we call for embedded loyalty – an integral approach to build lasting customer connections by leveraging your payment capability.”
