Automating Loyalty with Card Linking Part 1

POS loyalty checkout

A loyalty program delivered smartly will attract new customers, turn customers into repeat customers, increase business, and deliver valuable business data and demographic intelligence. While the world today expects elegant solutions achieved through technology and automation, it’s clear that most of today’s loyalty solutions, are still reliant on manual execution. As a result, the loyalty process interrupts the payment process and is often prone to delivering a poor experience for both the customer and merchant.

We can do better. It is time for loyalty programs to enter the twenty first century and become automated. A merchant loyalty program linked to the customer’s payment card offers all parties an easy, seamless, automated, reliable and accurate loyalty solution.

There are typically three basic challenges with loyalty programs that every CMO wants to improve:

  1. Enrollment – Cashiers don’t always ask customers to enroll, and customers don’t always want to supply personal information to a stranger.
  2. Tracking – Again, the problem is that cashiers are not always asking for loyalty numbers or cards associated with loyalty.
  3. Redemption – Customers are not redeeming rewards as expected.  They say it is too hard to download rewards and remember to bring to the store.

The reality is that everyone, including your loyal customers want convenience in their busy lives. One company, British Petroleum (BP), is making it easy for their loyal customers to earn points and rewards.

BP just introduced its card linking loyalty solution at the gas pump. Historically, customers had to swipe their loyalty card or enter a 10 digit number. BP customers can now go online and link their payment card to the BP loyalty card.  

After linking the credit card, a BP customer earns points every time they pay.  No additional steps to take. To redeem the rewards, the BP customer simply pays, and the reward comes off on their linked credit card statement.  Today this only works with Visa, but it is still a huge convenience for BP customers.

Retailers need to make it easier for customers to enroll, track and redeem rewards. That means in addition to letting customers earn and redeem points by showing their loyalty card or providing their mobile number at checkout, we should let our customers earn and redeem rewards with their existing credit or debit card.

Loyalty Program Background and Challenges

Today, a loyalty tracking system is typically manual. This means every time a customer pays, the cashier must ask: “Are you in our reward program?”

This question must be asked every time because a manual loyalty tracking system has no way of knowing whether the customer is in the retailer’s respective loyalty program or not. If a customer is not a program member, the cashier is supposed to ask if the customer would like to join the loyalty program. But many customers prefer not to share their personal info with a cashier. While customers can go online to enroll, once a customer leaves the store, it is highly unlikely that they will enroll.

Typical industry loyalty tracking form factors include:

  • A mobile number to a cashier
  • A mobile phone bar code
  • Loyalty cards

These loyalty tracking systems are manual, and as a result, for the loyalty system to track, the cashier has to ask every time if the customer is in the retailer’s program. This is a tedious process that slows the line and can frustrate customers who previously declined to enroll. Moreover, all cashiers are not created equally. Untrained, inexperienced, shy, introverted and lazy cashiers simply may not ask. These inefficiencies negatively impact enrollment, data accuracy, loyalty points tracking and customer satisfaction.  

With regards to redemption, a fraction of the earned rewards are redeemed. Many members complain that it is too much trouble to print out a reward and bring it to the store.  While breakage may be considered good for certain coupons, it is a negative for loyalty.  

If you want to evaluate your own loyalty rewards gaps, consider the following questions:

How easy is your enrollment process?

How easy is tracking and redemption?

Could automation improve your loyalty program?

What percentage of your customers pay with credit cards?

A low adoption and engagement rate for loyalty programs may be remedied with innovation. I will cover further process and improvement ideas in my next article.

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