Common strengths and weaknesses of loyalty programs assessed
January 30, 2013

Loyalty and gift card programs are becoming increasingly crucial for merchants and retailers of all kinds, as consumers now demand engaging and beneficial deals in exchange for their business. Retailers should consider launching loyalty programs that create the most convenient process for customers, such as through mobile device platforms.

RetailWire recently reported that the latest study from Edgell Knowledge Network (EKN), titled the State of the Industry Research Series: Customer Loyalty in Retail, found that many programs are failing to meet the preferences of consumers. This illustrates the importance of cultivating engaging loyalty programs, since not keeping customers interested could lead to poor returns on investment.

According to the news provider, EKN predicted that retailers expect much higher revenues to come from loyalty programs in the coming years. The survey revealed that nearly one-third of responding retailers plan to deploy new loyalty programs this year. The source explained that revenues derived from enrollment in such programs is expected to increase from 40 percent of overall sales in 2012 to 58 percent in 2015.

The survey also illustrated the importance clear, user-friendly loyalty programs, as 81 percent of enrolled members said they did not understand the benefits and rewards of the programs they are currently involved in. Further, experts believe that loyalty programs need to be highly personalized, targeted and emotionally driven to improve profits.

The most streamlined and intuitive strategies will often yield the strongest results, and merchants need to develop loyalty programs that can be incorporated into payment processing capabilities for optimal consumer engagement.

Integrated payment systems can help merchants cultivate stronger strategies and improve customer satisfaction in a relatively short period of time. With mobile-based loyalty programs and the ability to accept credit and debit card payments through a variety of platforms, merchants can capitalize on the current trends in consumer behaviors. 

Nexus: G-WEBCD6