Real value comes from giving merchants a choice of gift and loyalty solutions so they have the features they need to optimize customer experiences.
Building customer loyalty is crucial to competitiveness in today’s retail environment, and some merchants can invest time, resources, and capital into effective ways to retain and engage customers. However, a simple and effective option is to integrate gift and loyalty solutions with their payments platform.
The Importance of Gift and Loyalty Programs
Loyalty rewards programs and gift card offerings both play a role in keeping customers coming back. Consumers enroll in loyalty programs to earn rewards they can use on future purchases. In fact, U.S. consumers belong to 16.6 loyalty rewards programs on average and actively use about half of them. Additionally, Oracle research found that 77 percent of millennials redeem loyalty rewards at least once per quarter.
Gift cards also encourage return visits. Most obviously, someone will use the card’s value for a purchase. But research shows gift cards are likely to bring in additional revenues. Blackhawk Networks research shows consumers spend $31.75 more on average than the face value of a gift card.
In addition to achieving their primary objective of getting customers to return to a shop or restaurant, loyalty rewards programs and gift cards can result in even more benefits, including:
- More Cost-Effective Operations
Most businesses understand that it costs more to acquire a customer than to retain one. Therefore, focusing on customer loyalty rather than marketing to new customers is more cost-effective. On the other hand, if a business gets into a cycle where it successfully attracts customers but does not keep them, it can experience a “leaky bucket” effect. The company will invest in customer acquisition but never feel the positive impact of the higher customer lifetime value (CLTV) that loyalty brings. Customer loyalty results in a better bottom line.
- Data for Better Business Decisions
The data collected from gift and loyalty programs helps retailers market more effectively. It allows them to provide the personalized shopping experience that e-commerce giants have conditioned consumers to expect. Additionally, this data can help merchants better anticipate the most in-demand products to ensure they’re always in stock.
- The Ability to Build a Sense of Community
Merchants that can build a customer community can see higher loyalty. Some tactics that merchants can use include allowing customers to donate loyalty rewards or points to a cause they care about, bringing an element of gamification to campaigns, and interacting with customers on social media. Making customers feel like they’re a part of something bigger than just their interactions with a brand can keep them engaged.
- Word-of-Mouth Marketing
Consumers who are excited about loyalty rewards are likely to share news of that opportunity with their family and friends. Additionally, satisfied customers will choose their favorite merchants’ gift cards for gift-giving. Merchants who can create these experiences can see an uptick in referral business.
How to Manage Gift and Loyalty Programs Effectively
While gift and loyalty solutions can help merchants build a customer base and increase customer lifetime value, they can be challenging to manage. If they aren’t integrated with payments, it can necessitate extra steps – and extra time – at the checkout. A non-integrated system can also take attention away from customers and enhancing their experiences and force associates to spend their energy manually applying or awarding points or activating gift cards.
However, payments integration streamlines processes for sales associates and cashiers and enhances customer experiences with expediency, accuracy, and convenience. In addition, integrating gift and loyalty with an omnichannel payment platform gives consumers the ability to use and earn loyalty rewards and give or spend gift cards whether they make a purchase in-store, online, on social media, or at a self-service kiosk.
How to Give Merchants Choices
It’s important to remember that savvy merchants use loyalty programs to differentiate their businesses. Therefore, one loyalty or gift solution may not have all the features a merchant needs to create the experiences that will lead to a growing business. However, giving merchants choices of integrated gift and loyalty solutions can be challenging when each takes development, testing, and certification to work securely with payments.
A Payments Platform as a Service (PPaaS) solution overcomes this challenge. It’s an API-driven approach that allows an acquirer to integrate once with the platform and then gives merchants their choice of solutions from a catalog of options so they can use the gift and loyalty solutions with the features they need.
Real value comes from a gift and loyalty solution that enhances customer experiences and operational efficiency, collects meaningful data, and creates a foundation for a community of engaged consumers – with minimal time, resources, and investment to achieve it. Contact Ingenico to learn how to become part of the solution.
