Why The Payment Experience Can Improve Customer Loyalty
Customer loyalty has never been more fickle. Especially when customers are price sensitive, as we saw in 2017 and expect to see again in 2018; they shop around more and don’t stick with a brand out of loyalty. Value and deals become more important.
As a result, traditional loyalty schemes are viewed as a way to improve average order values amongst existing customers. Generating more revenue from existing customers – those who consider themselves loyal enough to say yes to a loyalty card or app – is far cheaper than trying to win new customers.
However, the majority of customers say they’re dissatisfied with the user-experiences of most loyalty schemes. Many end up forgotten, either plastic cards are taken out of wallets and purses and not put back, apps are deleted, and cards with stamps put in the bin. Only 44 percent say they are satisfied with the loyalty schemes they used, according to a 2016 Bond Loyalty Report.
A series of Bain & Company studies found that the average conversion of web traffic into purchases in e-commerce is only 3%. Whereas, companies with a high Net Promoter Score (NPS) – which includes loyal customers who keep coming back for more – don’t need to spend as much winning new customers when they’re generating more revenue off their existing customer base.
How to improve loyalty schemes?
When loyalty schemes are integrated with the checkout experience, customers won’t need to remember an additional step required to earn or redeem points. It will be seamless.
Technology already exists that makes this possible. Removing that friction in-store and online makes it much easier for customers to earn points; therefore making it more likely they will want to redeem them for special offers, which will drive up average order values, and give them a good reason to tell friends and family about their great experience.
Traditional schemes, which aren’t connected to physical and online checkouts are limited. In many cases they’re no longer fit-for-purpose, and customers don’t have the time or patience to engage with an additional step when buying goods and services – which is why ROI from these schemes is often so low. Taking an innovative approach, by integrating loyalty schemes with the checkout process, is one way a retailer can stand out and win some much-needed market share from competitors.
Furthermore, with GDPR coming into force in May, traditional loyalty management could for many online merchants, require an overhaul. Making sure your database is secure, that everyone on the database has opted in and still wants you to process their personal data (what happens to the points they’ve earned if they don’t want you to keep their data?) and working with third-parties on the collection, processing and transfer of data could prove a challenge.
When you have a loyalty scheme that connects directly with payments, you can rest assured that data protection and security is already going to be on the same level as bank transactions. Working with a payment provider with PCI DSS Level 1 compliance means you can have peace of mind over data security, whilst at the same time, knowing that your customers are getting a loyalty experience that will generate higher returns and keep them coming back.
If you have any questions about this subject, please contact our team on 0333 240 6000 or email [email protected]