Loyalty programs have been one of the most prominent business trends of the past few decades. They have transitioned from their traditional domain of airlines and grocery retailers to becoming integral incentives among business-to-business markets, offline and online services, and utility providers, to that of non-profit organizations, such as charities, museums, and sports clubs.
Penetration and Reinforcement
Today, loyalty programs continue their substantial impact and penetration in the retail sector. Beyond reinforcing customer retention and loyalty, loyalty programs enable retailers to increase their market shares by utilizing their digital wallets, cross-selling, and up-selling additional products to their client base. However, as more banking institutions and retailers offer loyalty programs increases, the battle for incorporating this product into the digital wallet ecosystem intensifies.
The Battle Between Investment and Membership
Market research suggests that most customers who sign up for loyalty programs eventually abandon their program, exacerbated by the investment costs necessary for businesses to invest in loyalty programs and their ability to leverage their benefits, questioning their sustainability. These concerns suggest that business focus should be replaced by fundamentals such as gamification, mobile marketing, and social media leverage instead of loyalty program investment. However, to calculate the real return on loyalty program investing, identification of the members’ and non-members’ demographics and shopping behaviours is essential to moving forward with loyalty program incentives and initiatives.
Youtap has long embraced the initiatives and incentives that loyalty programs offer their client base. Integrating their loyalty platforms into your customized networks provides your customers with a wide range of customer retention loyalty schemes. These reward initiatives turn singular customers into becoming loyal customers, offering them incentive accounts across devices and loyalty types. Their software reports to their client, informing them which customized campaign has been the most effective and which campaign is performing the best for their individualized loyalty and rewards programs.
Being a part of the loyalty program trend is consumer-centric. Convenience and effort by the client need to weigh against the earning benefits of a loyalty program or the retailer. The core idea of leveraging information gained through loyalty initiatives remains a strong incentive for businesses. To remain attractive and viable as an investment in an increasingly competitive digitalized banking and retail environment, consumer demand and loyalty program membership penetration need to stay current.