The case for ETA’s loyalty micro-credentialing program
By Jeff Mankoff and Neil Axe, ETA CPP
In today’s hyper-competitive payment processing marketplace, payment processing sales professionals need door openers—beyond price undercutting—to increase merchant profitability and customer retention. One key differentiating path is empowering ISOs and sales agents to sell loyalty and rewards solutions to merchants. However, agents sell only what they know best. To help agents become experts in the loyalty space, ETA is introducing a web-based loyalty micro‐credentialing curriculum. More details about this program later.
Why Loyalty and Reward Programs Matter
Loyalty and rewards are big business, and small to medium-sized business (SMB) merchants know this. In fact, the global customer loyalty marketplace is $200 billion strong—composed of an ecosystem of billions of consumer transactions (with 3.8 billion individual loyalty program memberships issued last year in the United States alone). Loyalty, well executed, is a proven strategic tool for optimizing customer lifetime value and maximizing ROI for SMB merchants. More specifically, here are five reasons why loyalty and reward programs are a top priority for SMBs
1. For in-store merchants, loyalty is the only solution to identify their best customers. Without knowing the customer, a merchant cannot establish a meaningful, sustainable relationship. To‐date, the most successful in‐store loyalty and reward offerings are hosted primarily by the largest Tier 1 and Tier 2 brands (e.g., Starbucks, Amazon, Walgreens, Sephora, and Nordstrom). However, the situation for SMBs is rapidly changing; ISOs are enabling them to think, act, and execute like their larger merchant cousins. ISOs have recognized the strategic upsell business opportunities, and they are now providing SMBs with sophisticated, differentiated, affordable, and scalable value-added solutions that increase revenue and reduce churn.
2. Payments and loyalty are interdependent for tracking loyalty purchases. ISOs had limited success in selling early generation, mag‐stripe‐based loyalty schemes. Unfortunately for ISOs, consumers increasingly refused to carry those cards, or merchants preferred not to clutter their counters with additional devices for tracking loyalty purchases. But times have changed. New loyalty solutions are now streamlined and integrated with payments so that loyalty is automatic. Now is the time for ISOs to reclaim loyalty.
3. New POS payment terminal platforms are now customer-facing. Updated POS systems are transforming into smart loyalty engagement devices—designed to seamlessly integrate and enable automatic enrollment, loyalty tracking, and rewards redemption. Cayan, owned by TSYS, and vPromos, a terminal integrated loyalty provider, offer separate loyalty solutions that allow consumers to seamlessly earn and redeem points simply by paying with their chosen payment card, all without additional cluttering loyalty tracking hardware. These integrated loyalty platforms also provide additional stored payment and shipping credentials, email-delivered receipts, and purchase history archives.
4. Integrated loyalty solutions come with Big Data analytical software tools. With payment‐integrated loyalty data, SMBs now have answers to questions like the following:
- Who are my best customers?
- What are loyal customers spending vs. nonmembers?
- How often do the merchant’s best customers shop?
- How long do the merchant’s customers stay loyal before churning?
- What is a merchant customer worth?
- What is the lifetime value of my customer?
From these tools, SMBs gain real-time insight and intelligence about their ongoing performance and realize prime top-of-mind future opportunities for establishing meaningful, sustainable, customer relationships from which to personalize and customize 1:1 promotional offers and communications via email, text, social media, mobile app, phone, or post.
5. Loyalty reduces client churn to competing ISO providers. Terminal and POS‐integrated loyalty solutions are sticky for ISOs. Merchants with a loyalty base in the thousands will most likely not be willing to forfeit their loyalty program to save processing pennies.
Loyalty is central to payments, and, thanks to continuous advances in POS terminal technology, artificial intelligence (machine learning), and third‐party loyalty software‐as‐a-service providers, loyalty is the perfect value‐added solution for ISOs and their merchant customers. This is game changing, whereby ISOs now can empower SMBs to be enabled on par with Tier 1 and Tier 2 merchants.
Learnings and Benefits of ETA Loyalty Certification
ETA is helping ISOs to accelerate their transformation into becoming expert providers of loyalty and rewards solutions. Beginning in April during TRANSACT 2018, ETA will announce details about a web‐based micro‐credentialing course to aid ISOs in becoming versed in loyalty fundamentals and best practices. Powered by the Loyalty Academy (loyaltyacademy.org) from the Wise Marketer Group (thewisemarketer.com), the ETA‐hosted web‐based curriculum contains four one‐hour individual loyalty training modules led by senior faculty members of the Academy. The modules cover the following:
- Principles and best practices in loyalty marketing.
- Industry and consumer behavior trends that impact loyalty.
- SMB‐specific targeted marketplace needs.
- Tips, technologies, and sales tactics for ISOs to penetrate the market.
This curriculum and mini-certification will enable the aspiring loyalty expert to become more versed in the capabilities and expectations required by ISOs to open doors to countless opportunities at SMBs in today’s hyper-competitive payment processing marketplace.
Jeff Mankoff is the founder and CEO of vPromos Inc., the holder of numerous card-linked loyalty and promotion patents, and a member of the ETA Retail Technology Committee. Reach him at jmankoff@vPromos.com. Neil Axe, ETA CPP, and Certified Loyalty Marketing Professional, is director of value- added services at Cayan (owned by TSYS) and leads product and strategy of Cayan’s InGenius Incentives loyalty and rewards solution. He is a member of the ETA Professional Development Committee. Reach him at email@example.com.
This piece was originally published in Transaction Trends Magazine.