If you've read anything on the costs of customer acquisition vs customer retention over the last 20 years, you'll have heard that customer retention makes good business sense. And while the traditional loyalty card is dying out, loyalty itself is more alive than ever - but marketers need to take a different approach, according to myCircle.
Experts claim that it costs anywhere between 3 and 30 times more to get a new customer through your door than it does to persuade an existing one to return - even if that door is virtual, in the form of a website or mobile app. With figures like that, just imagine the increase in profit margin a business could make on something as simple as a cup of coffee� if it's customers loyally returned on a daily basis.
The traditional answer to this has always been the loyalty card, but the truth is, whilst loyalty schemes are more popular than ever, the loyalty card that you are so readily handing out� the one that your customer has just stuffed inside his or her wallet or put on a key fob, is dead weight. In an age where the world is moving toward an integrated online/offline experience, the loyalty card is inflexible, inconvenient and simply no longer fit for purpose. Cards get lost or forgotten, rewards go uncollected and the loyalty that you're expecting your card to deliver, will never arrive.
Even the modern day 'web-based reward card' has its limitations. After all, what is there to remind the consumer that your reward scheme even exists? There's no scratched up, faded card taking up space in their wallet and the email statements you helpfully send out on a weekly basis are either unsubscribed from or automatically filtered into the junk mail folder. And what happens as a consumer, if I come into your store, your cafe, your bar or your restaurant and I make a purchase? There's a critical disconnect between a web-based reward programme and the bricks and mortar experience, and that means, once again - the value of the loyalty scheme is lost.
So what is the answer? There's no question that customers can still be influenced to give loyalty - providing that we as merchants, reward them for it. The key lies in convenience and accessibility and this comes in the form of mobile payments. By enabling mobile payment functionality throughout your online and offline channels, you're able to integrate a loyalty programme into the payment system. In doing so, you're streamlining the purchasing process, delivering better service and immediately and conveniently rewarding customers for their loyalty.
Just imagine if your customers could pre-order a round of drinks or a meal-deal from a mobile app, pay and collect loyalty points, all in one smooth transaction. No need to fumble around in a wallet for a card, no need to check your points tally online and no need to go through your junk mail searching for the latest statement to see if you've got enough points for a free cappuccino. Instead, your customers are getting the instant gratification of being rewarded at the moment of purchase and that feels great.
So while the loyalty card itself may have had its day, a loyalty programme done well is more powerful than ever. The only question left is who's going to make the first move and unify the consumer experience across channels? Who is going to take it a step further and integrate loyalty with mobile payments - you or your competitors?