By Michael Gavin
Providing a positive customer experience is critical to running a successful business in today's world. More and more businesses are realizing the value of loyalty programs and the significant impact they have on the bottom line. According to a recent study by Boston Retail Partners, Loyalty Programs – Rewarding the Customer Experience, 46 percent of retailers have prioritized gift and loyalty programs.
The study also revealed that 56 percent of retailers plan to participate in mobile loyalty apps within five years. With loyalty programs becoming a common piece of every business, payment professionals can take advantage of offering such programs to their merchants.
Here's a look at why merchants should offer loyalty programs, why you should pitch them to your merchants and how merchants can implement loyalty programs.
Loyalty programs help merchants increase recurring visits, boost consumer engagement and build customer loyalty. They are a strong revenue driver for businesses due to the increase in consumer spending they encourage. According to a November 2014 Forbes article, "How to Make More Money Without Making More Sales," repeat customers spend about 67 percent more than first-time customers. Providing customers with loyalty offers and rewards incentivizes them to spend more and visit more frequently to get closer to their next reward.
Consumers love rewards points for any type of purchase. Small businesses typically use punch cards that, for example, offer free beverages to people who visit 10 times. While consumers find value in these punch cards, there isn't much benefit for the businesses due to limited tracking capabilities. Punch cards can also be a hassle for consumers who forget to bring them along when shopping.
With the various technologies available today, small businesses can say goodbye to punch cards. New technologies, such as tablet-based POS systems, are on the rise, making it more affordable than ever for small businesses to take advantage of robust loyalty programs comparable to those offered by large retailers. Cloud-based loyalty solutions have built-in analytics so businesses can design customized loyalty programs and gain insights on customer behavior. Having access to this data allows businesses to incentivize consumers with relevant, targeted offers to keep them coming back.
Mobile apps and new payment services, such as Apple Pay and Android Pay, have integrated loyalty capabilities that merchants can also take advantage of. As mobile usage increases among consumers, merchants must consider mobile for loyalty programs to keep pace.
Not all loyalty programs are successful. They require some initial legwork and testing, but once merchants learn more about their customers and what they want, they can customize their loyalty programs to fit their needs. Merchants must also be clear on what the loyalty member benefits are, and offers must be well-timed and relevant to the customer.
If you're a merchant level salesperson, pitching a loyalty program can be easy. Presenting such a program as a new offering to your portfolio is an opportunity to provide additional value to your merchants while you earn additional revenue. You're also likely to increase retention because merchants are less likely to move their credit card processing if they have multiple services (that is, loyalty programs) from one provider. It's also simple to sell loyalty programs because almost every vertical can benefit from them.
In today's competitive world, there's no reason why small businesses shouldn't implement loyalty programs. They drive recurring visits, improve the customer experience and increase bottom line revenue. Start selling loyalty programs and take advantage of the revenue opportunities they bring to both you and your merchants.
As Cayan's Senior Vice President, Sales, Michael Gavin is responsible for day-to-day management of the company's direct sales efforts including organizational structure, sales forecasts and overall strategies. He also oversees all sales activities within the company's agent channel, a growing network of more than 400 independent representatives throughout the United States. Michael has served as a key leader within the organization since joining the company in late 2000. An individual who has made numerous key contributions, Michael was the architect behind the design and development of the agent channel. Michael is a graduate of Merrimack College where he earned his Bachelor of Arts degree in Political Science. Contact him at firstname.lastname@example.org.
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