Digitizing loyalty programs is the need of the hour. Especially at a time, when more than 86% of the world’s population (over 6.92 billion people, as per BankMyCell stat) owns a smartphone and a majority of them would like to engage with digital loyalty programs via their smartphones (stat by CodeBroker).
This blog post discusses digital loyalty programs in detail, starting from their features, benefits, and the steps to implement a robust digital loyalty program. Read on and thank us later.
1. Superior data collection
Did you know that businesses that use zero- and first-party data for their loyalty programs and other marketing strategies report 1.5 times to three-fold increase in their revenue?
One recent data released by BCG revealed. Digital loyalty programs capture relevant zero-party and first-party data from customers and businesses easily and effectively.
When customers and channel partners enrol in a digital reward program, they voluntarily provide all their relevant information and data.
2. Tailored rewards
When brands collect and leverage relevant zero and first-party data, they can tailor loyalty rewards efficiently and effectively.
As per a Deloitte study, more than half of the brands that took part in the study said that they deploy first-party data to deliver personalized rewards.
In fact, PwC found out that eight out of every ten respondents said they are willing to share personal data in return for a better customer experience.
Digital loyalty programs enable brands to tailor their rewards to the needs and preferences of various segments of customers and channel partners.
3. Omnichannel support
Did you know that brands that have robust omnichannel loyalty strategies have an average customer retention rate of 89%? That’s almost 2.7 times the number for companies with weak omnichannel customer engagement (33% of the average retention rate). Omnichannel customers have a 30% greater lifetime value compared to single-channel customers.
Digital loyalty programs provide omnichannel support, which enables customers and business partners across all marketing channels including mobile devices, tablets, and personal computers.
In omnichannel digital loyalty programs, customers don’t just have to make purchases to gain loyalty rewards and points. They can also get rewarded for participating in surveys, playing games and quizzes, and taking part in many other interactive and engaging activities.
4. Real-time analytics and reports
Measuring loyalty programs on various parameters is extremely crucial to know if they are performing well or if they need some improvement. In traditional loyalty programs, measuring and quantifying the various key performance indicators (KPIs) isn’t effective. But in digital loyalty programs, it’s extremely easy, quick, and cost-effective thanks to real-time analytics and reports.
Sophisticated analytics and reports generated in real-time can enable small and medium companies to know what’s suitable for their business and customers and take all corrective steps to achieve the desired results.
5. CRM integration
CRM (Customer Relationship Management) system is an extremely effective tool to build customer loyalty.
As per the latest stats, almost half of the respondent companies that use CRM say that the system has a huge impact on their customer satisfaction rate, and more than 90% of them believe that adopting a CRM system is critical to achieving their customer-centricity goal.
Digital loyalty programs can easily integrate with existing CRM systems and enable companies to build long-lasting relationships with their customers to enhance customer satisfaction and experience.
📜 Suggested Read: What is a Digital Loyalty Program? How to Implement One?
Benefits of Digital Loyalty Programs
Since their inception, digital loyalty programs have provided many benefits to contemporary businesses. They have not only reduced costs, saved time, and improved efficiency but have also provided some benefits that have a massive influence on a lot of other things such as a company’s long-term goals, digital adoption, as well as the environment.
Let’s take a look at five such benefits.
1. Valuable insights into customer behaviour
Digital loyalty programs can provide valuable insights into customer behaviour and preferences. By leveraging digital loyalty programs, businesses can use customer data to customize offers, rewards, and experiences.
The advanced real-time analytics and reporting tools in digital loyalty programs can enable businesses to know if their loyalty programs are performing the way they should.
2. Enhanced brand loyalty
By providing suitable rewards, digital loyalty programs can retain tech-savvy customers.
A stat found that more than 90% of customers will make repeat purchases from brands that provide positive experiences. Businesses that aim to boost customer experience register a minimum of 10% boost in customer loyalty.
A study conducted by McKinsey revealed. The research also revealed that 60% of customers increase their spending after enrolling in digital loyalty programs.
3. Improved LTV
Digital loyalty programs help businesses achieve much higher customer lifetime value (LTV). When businesses register just a 7% improvement in brand loyalty, they can achieve up to 85% growth in LTV,
As per YouGov research emotionally-connected customers have a 306% higher LTV compared to satisfied customers. When businesses enhance their brand loyalty by leveraging digital loyalty programs, they automatically witness a rise in their LTV.
4. Easily accessible
One of the best things about digital loyalty programs is its accessibility. In the digital age, customers don’t need to visit a business and show their coupons or tokens to get loyalty rewards. Customers can easily access digital loyalty programs by using a wide range of devices.
A CodeBroker study reveals that nearly 75% of respondents say that they engage with loyalty programs using their smartphones.
Digital loyalty programs are far more eco-friendly compared to traditional loyalty programs. Digital loyalty programs don’t need pen and paper for record-keeping. They also don’t need any physical space. This enhances their green credentials and makes them perfect for organizations that want to be more environmentally friendly.
📜 Suggested Read: Robust, Fully Automated, And Cost-Effective Loyalty Program For Digisol
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How to implement digital loyalty programs
Now that you’ve decided to digitize your loyalty programs, you have two options—to design digital loyalty programs in-house or join hands with a reputable and trustworthy loyalty solution provider that’ll make it a lot easier and quicker for you.
Here are four steps that would help you cost-effectively implement digital loyalty programs.
1. Handpick the right loyalty platform
In a competitive market, finding a loyalty platform can be extremely easy. However, selecting the right solution provider can mean the difference between success and failure. Make sure that you do thorough research and due diligence to find some extremely promising loyalty providers.
Visit their website and find out more about their platforms. Look for testimonials and case studies. And make sure they provide free demos to help you make informed decisions.
2. Select the right system for your loyalty programs
There are four main systems by which you can provide loyalty rewards. They are:
- Product-based loyalty system: This is the easiest and fastest loyalty system compared to all others. If you want a flexible and simple system to provide loyalty rewards, consider selecting a product-based loyalty system.
- Points-based loyalty system: This system provides customers with loyalty points for their purchases. It’s the most common reward system used by most companies.
- Visits-based loyalty system: This system enhances store visits and encourages customers to view more of your products and services. You should use this system if you want more footfall in your store.
- Cashback-based loyalty system: This system is useful to boost customers’ cash spending on products, services, or experiences.
3. Select the right loyalty rewards
When it comes to rewarding your customers, you have a wide range of choices. You can provide them with financial rewards such as cashback, discounts, offers, etc. You can also provide them with many types of experiential rewards such as passes to sporting events and concerts, movie tickets, special dining coupons, and more.
To customize rewards for each customer segment, you have to combine some financial and experiential rewards to provide a balanced mix.
4. Promote your digital loyalty program
After your digital loyalty program is ready, make sure that you promote it actively using a broad array of channels, such as social media, newsletters, mobile apps, and more. Consider giving a signup reward to encourage your target audience to join your digital loyalty program.
Digital loyalty programs are more crucial than ever before. Apart from being cost-effective and time-saving, they are far more eco-friendly than other loyalty programs and they can help businesses succeed in a lot of ways. The best thing about them is—they are extremely easy to run and manage.
At LoyaltyXpert, we have helped all types of businesses around the world with our various types of digital loyalty programs. If you want to have an effective digital loyalty program in place, Call us today to know how we can help.