Article

Dr. Islam Gouda
Dr. Islam Gouda 17 April 2020
Categories B2B, B2C, Customer Experience

Customer Loyalty: It's About the Programs

Loyalty programs are very crucial these days for creating long term relationships between merchants/companies and customers. It is important to understand it is not only about creating the programs but the right tools in order to create successful ones.

In a world filled with many brands and companies, loyalty programs are used to provide customers with incentives to encourage a frequent purchasing pattern. The concept is great; any customer provided with a loyalty card can collect points when making purchases. 

But these many loyalty cards are not the problem; the digital mobile world has provided a chance for retailers to create their own apps in order distinguish themselves and allow their customers a chance to organise their collected points and use them when making their purchases. 

 

The main problem with loyalty programs is the variety of schemes created by the retailers, the lack of a face-to-face engagement with customers created by self-service in retail, and the increased commoditisation of the retail experience. 

If loyalty programs provide a chance to the customers to be more loyal to the brand, they actually alienate the brands from their customers by making their shopping experience difficult. Customers have to consider all the elements of the loyalty programs and how to collect and redeem points. 

The other main problem about loyalty programs is that companies think about their customers as transactions, bearing in mind their own interest and not the interest of the customer. These customers don’t care about the retailer’s intention of stocking a shelf, they want engagement with the retailers in a way that facilitates product offering. 

Retailers, who understand their customers well, implement their loyalty programs, reward their customers for being part of the program, offer a more tailored program via email, based on the customers wants and needs, and create a two-way communication of receiving feedback about the purchases of the products/services and the loyalty programs themselves. 

Additionally, loyalty programs are not only ways to encourage the customers to make more purchases, they are as well considered a great tool for data generation regarding the purchasing patterns of the customers – allowing companies to understand the products/services most consumed by the customers and provide feedback for the manufacturers regarding the products they will be offering based on consumer preferences. 

The world of retail is filled, customers’ wallets are already packed with various loyalty cards, and their phones have already started to be filled with loyalty apps. A great retailer is the agent for the customers, understanding that loyalty programs are ought to reward the loyal customers and provide a way for the retailers to better understand their purchases to provide better offering.

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