More and more merchants are building loyalty rewards into their business strategies and upgrading to new, integrated loyalty systems. The global loyalty program market is projected to reach more than $142 billion in 2022 and more than $225 billion by 2026. Merchants are willing to make those investments because they’re sold on these benefits of a loyalty strategy.
Loyalty ROI
Study after study shows that acquiring a new customer is more expensive than retaining one. Merchants see a better return from an effective loyalty program than spending their marketing budgets on other options, such as mass mailings or shotgun advertising.
Consumer Expectations
Most U.S. consumers take advantage of loyalty programs – 80 percent of U.S. consumers are members of at least one loyalty program. Furthermore, the average American is enrolled in16.6 loyalty programs and actively uses 7.6 of them. Additionally, as inflation continues, half of all U.S. consumers consider loyalty programs important for making ends meet.
Loyalty Program Data
Loyalty program members are willing to provide information for better experiences. That information can help retailers, restaurateurs, and other merchants to build their marketing lists, personalize experiences, and learn about the make-up of their customer bases. Insights from loyalty solution data can help merchants make smart decisions in a range of areas vital to their businesses, including inventory, merchandising, and staffing.
Competition
Loyalty programs are a game of one-upmanship. A retailer that still offers punch-card-type rewards can’t equal the experiences of a business that has a loyalty app, gamifies rewards, and automatically sends offers to consumers who opt into the program, possibly even via beacons when they walk into the store. When it’s time to ramp up their loyalty capabilities, merchants will want new technology to support them.
The Problem for Acquirers and Payment Technology Providers
It’s common for point of sale (POS) and payment solutions providers or acquirers to include loyalty program software as a value-add with their offerings. Integrated loyalty allows merchants to provide loyalty rewards without having to incur the expense of integrating loyalty software on their own. Furthermore, solutions providers and acquirers find that adding loyalty can make a solution more attractive to their clients.
Typically, a POS or payments platform provider establishes a partnership with a loyalty software developer and integrates the solution so that it works seamlessly with its platform. However, forming those partnerships and successfully integrating loyalty with a POS or payments platform requires time and resources. It can slow time to market when merchants demand new loyalty program features – or it may be a barrier to providing them at all. Moreover, it can hurt an acquirer’s or solutions provider’s competitive position.
The Easy Way to Achieve Integrated Loyalty Choice
Acquirers and solutions providers will find new agility when their payment technology partner takes a Payments Platform as a Service approach. This cloud-based, API-driven service enables loyalty solution providers, as well as alternative payment and payment services providers, to integrate easily with the payments platform.
Payments Platform as a Service only requires solutions providers or acquirers to make one integration. Then the merchants they serve can choose from available loyalty solutions to create experiences that will delight their customers. Additionally, if merchants decide to change loyalty strategies, they can select a different solution connected to the as-a-Service platform – no intervention by the acquirer or payments solution provider is required.
Loyalty programs will continue to be a priority for merchants and loyalty schemes will undoubtedly change. Merchants need a way to keep up with evolving consumer preferences, advancing technology, and tougher competition for wallet share. Protect your business and your client relationships by building a strategy that will deliver the agility merchants need.
Contact Ingenico to learn how to make it happen.
