The loyalty-program argument with mobile payments
With mobile payment apps, retailers enjoy faster transactions — as every retailer knows no shopper likes to face a long line to check-out.
Technology, these days, is constantly evolving, but one thing that has not changed over time is the need for companies to engage, maintain and grow their customer base. While technology has provided new ways of reaching broader audiences, the ability to secure customers has become increasingly difficult. Customers now care not only about who has the best product, but also about who provides the best customer experience.
Modern consumers are savvier and more technologically versed than ever. They can compare prices and items effortlessly with a few taps on their mobile devices — ultimately leading them to the best deal. Brand loyalty is declining, as the vast majority of purchases are made based on price.
With this stark reality, hospitality brands are pushing to identify innovative ways to maintain their base of loyal customers. A recent study from the Center for Retail Management at Northwestern University highlighted that 12 to 15 percent of customers are loyal to a single retailer, resulting in 55 to 70 percent of the retailer's total sales. And since it is more costly to attract new customers than it is to retain existing customers, more brands are avidly looking to engage and develop loyal patrons.
Tying loyalty programs to the POS
One effective way to encourage repeat customer visits is through loyalty programs. This method of consumer engagement is a pillar for hospitality brands, and a key aspect in sustaining business performance. With the growth of social media, customers hold higher levels of influence over a brand's reputation. To maintain customers in a saturated market, loyalty programs provide differentiating offers and discounts for returning guests. By analyzing user data, brands can offer timely and relevant rewards or one-of-a-kind promotions aimed at exciting members and instilling a sense of exclusivity.
Clearly, this idea of loyalty programs isn't new. They were initially employed using paper coupons and punch cards manually redeemed at checkout registers. However, the rise of mobile payment apps has bred robust digital loyalty programs.
Today, digital platforms tie loyalty programs to consumption and are automated and integrated into the POS system. Each purchase is automatically tallied, and when customers meet the threshold needed to redeem a reward, they're notified in real-time on their phones and it appears on the POS. This ensures greater immediacy for both customers and restaurants, and removes the possibility of human error. Digital programs also appeal to business owners because they are secure and precise.
Because they are so compelling, loyalty programs are driving mobile payment app adoption. Retailers recognize mobile payment apps enhance the guest experience and help extend their brand. With mobile payment apps, stores enjoy faster transactions — and consumers aren't facing long lines and check-out time.
It's crucial for brands to evolve their offerings in ways that simplify, but at the same time enliven the customer experience. Mobile payments definitely further this goal. A recent report from Forrester forecasted U.S. mobile payments will increase from $52 billion in 2014 to $142 billion by 2019. This increase highlights a huge opportunity for the retail industry; integrating loyalty programs with mobile payment offerings paves the way for customer retention in a crowded market, and represents a marriage that will benefit both the consumer and the retailer.
Tal Nathanel Tal Zvi Nathanel is the cofounder and U.S. CEO of MyCheck. Founded in 2011, MyCheck transforms guest experiences through faster checkout, increased loyalty and customer engagement and provides hospitality brands with the tools, data and analytics needed to better understand and interact with customers. MyCheck’s technology platform is utilized by hospitality brands such as Twin Peaks and Blockheads, among others. The platform is integrated with 27 different Point of Sale systems and is also built in to apps, reaching more than 50 million consumers. www