Today’s digitally transformed marketplace offers new tools and strategies to help brands establish influence and drive loyalty.
In Part 1 of our Consumer Incentives Insights series, we noted that customer loyalty is strongly tied to rewards and rebates. In fact, incentives encouraged shoppers to choose brands they were not previously loyal to. Part 2 covered ways to improve the consumer incentives experience and deliver on customer expectations, like fast digital payments.
But what does loyalty actually look like in an era of unprecedented consumer choice, and how does the incentives payment experience factor in? In Part 3, we’ll take a closer look at loyalty programs to discover their effect on customers’ brand impressions and resulting behaviors. In our survey, we found that loyalty wasn’t a thing of the past; it simply depended more on incentives that honored customers’ payment preferences and fit seamlessly with their lives.
Driving brand engagement
At their simplest, loyalty programs are designed to keep customers coming back...or prevent them from leaving. A study by ComCap found that 46% of consumers were willing to switch vendors to maximize loyalty benefits.
Incentives also have the power to turn customers into unofficial brand ambassadors or encourage them to engage with brand content. Over half of respondents said that after receiving a reward or rebate, they were likely to tell others about their experience, while 38% said they’d leave a positive review. After having a great rewards experience, 69% said they were likely to visit the brand’s retail locations. And, 41% would follow the company on social media.
Delivering a rewards experience that gets customers talking depends on a clear understanding of their payment preferences. Digital, open-loop cards were the most popular option, with 45% preferring this payment method. Open-loop cards are more than just a convenient, cost-effective way to implement rebates and cash-back programs. They also offer maximum freedom and flexibility, since they can be spent anywhere credit cards are accepted. While rewards that can only be spent at your location — like loyalty points or merchant gift cards — may seem advantageous on the surface, open-loop cards have greater perceived value for customers. So, they could inspire that social follow or enthusiastic review.
Taking back influence
When online spaces buzz with reviews, advice, and promotions, it’s important to stand out.
Loyalty programs achieve that by helping to reestablish companies as product authorities. That may be particularly important in purchasing categories such as automotive, household appliances, and technology, where knowledge is power.
In our survey, most consumers said that next time they made a purchase, they would be at least somewhat likely to start with a brand from which they’d had an incentives experience. That included receiving a rebate or belonging to the brand’s loyalty program.
Even better news: 56% of consumers said they’d start the search directly at the company’s website, indicating they trust the brand enough to go straight to the source. That gives merchants the power to educate customers and make personalized recommendations.
In fact, nearly half of North American consumers wanted industry knowledge to be a feature of loyalty programs. For companies that want to preempt price wars by establishing a more consultative approach, the chance to gain greater influence makes a compelling argument for investing in incentives.
Differentiation is key
While simply having a loyalty program can work in your favor, standing out is even more important. 44% of consumers participate in four or more loyalty programs, and 7% belong to more than 10. So, how can you give your program a competitive edge?
Start by giving customers a digital experience that’s seamless, personal, and reflects your brand values. Companies like Ford and Tarte Cosmetics have excelled by creating fun, habit-forming loyalty experiences that make it easy to keep spending. Ford offers a one-stop app where users can earn loyalty rewards and complimentary maintenance, plus get roadside assistance and monitor their vehicles’ “health.” Tarte lets members earn loyalty points simply by referring friends, opening promotional emails, and more — a win-win for the company and its fans.
In the rebates space, open-loop cards have proven to be a powerful incentive across industries like automotive and telecommunications. In these industries, consumers often spend back their rebates with the sponsoring merchant — whether that’s to pay a phone bill or enhance a new car with branded driver accessories. What could be a better example of loyalty?
With digital payments leading the way in consumer incentives, businesses have to think beyond the loyalty punch card to deliver a memorable experience. That means understanding the full potential of the incentives space and knowing how to leverage the latest technologies to drive loyalty that lasts.
Ready for the complete scoop on harnessing the hidden power of incentives? Download our report, 2019 Consumer Incentives Insights: The Digital Transformation of Rewards, Rebates, and Loyalty