Loyalty programs help to drive customer engagement
March 14, 2013

Loyalty programs are by no means new inventions in the business world. For decades, companies across North America have run incentive initiatives to get people to venture in-store and then keep coming back with repeat business. What is relatively recent, however, is the technology that enables almost any business to run loyalty programs - no longer are they relegated to the big corporations with the manpower to manage initiatives.

Mobile devices make it easy to set up, manage and promote loyalty campaigns. Businesses can use apps and computer programs to implement them, and then consumers use their phones to collect and redeem points when making a purchase. Companies no longer have to print expensive cards and consumers only need their phones to take advantage of the programs, which spares shoppers from having to rummage through their wallets for loyalty cards. With the mobile channel, loyalty initiatives are much more convenient than they ever have been in the past.

At the recent International Customer Experience World convention, several major consumer brands all extolled the benefits of mobile loyalty systems. Telefonica Europe and its child brand O2 recently introduced the "Priority Moments" incentive program that provides customers with discounted products and services based on their geographic location. Similarly, Nokia Rewards enables customers to earn points that can be spent on downloadable music and take advantage of discounts on free gear and phone covers.

"When consumers feel it's their brand, they're invested in it," said Wilfred Emmanuel-Jones, founder of U.K. sausage brand The Black Farmer, in his keynote address at the convention. "It's important to get face to face and introduce humanity into the process because it makes customers feel better, not so much just a bit of the machine."

In many regards, mobile payments are just the solution that loyalty programs need. By tying together mobile payments and incentives, companies can reward customers for shopping while simultaneously streamlining the purchasing process. These programs are also much easier for all parties involved and more cost-effective to run.

For businesses, the combination of payments and loyalty systems also improves their ability to gain insight into purchase patterns and behaviors, which helps them improve sales and customer retention in the long run. This is crucial because keeping the same customer making repeat purchases is much less expensive than spending money on marketing campaigns to attract new business.

Nexus: G-WEBCD2