June 1, 2018
What could other types of retail outlets use a real-time, POS-based customer rewards program to improve engagement?
Immediate response and gratification are the expectation of almost every modern consumer. In the world of Amazon Prime, a survey by A.T. Kearney last year found that only seven percent of people reported that they were willing to wait six or more days for a delivery.
Loyalty programs are no different – consumers who must wait too long will not be satisfied. Companies who can meet the challenge of today’s loyalty program expectations can grab a competitive edge, however.
Legacy model loyalty programs are typically centered on engaging consumers through a company’s website. The issue, however, is that web redemptions take time and effort on the part of the consumer – not to mention, waiting for reward delivery if a merchandise option is chosen.
I believe that the No. 1 challenge in the industry today is the lack of engagement. Consumers sign up for loyalty programs, but only actively participate in about half of them; even if they participate, few do so on a regular basis. In fact, an Accenture study found that 63 percent of consumers participate in customer rewards programs, while only 19 percent use them regularly.
To truly engage consumers, companies must connect with them on their terms. One example of an innovative program that’s re-engaging consumers is FIS’ Premium Payback. An extension of current loyalty programs, it takes no reward options away from consumers but provides an additional vehicle for redemption – one that’s in sync with consumers’ expectations for real-time rewards and their customer journeys.
The objective of a loyalty program such as Premium Payback is to “surprise and delight” participants at the point-of-sale. It’s currently employed in a fuel venue and mitigates many of the barriers in the customer journey:
This represents a fundamental shift in rewards models. The legacy model dictated that you waited for consumers to engage with you. In the new model, rewards opportunities are seamless and integrated with consumers’ life activities. You engage with consumers as they live their lives and pursue their individual customer journeys.
Retailers – especially those selling mostly commodity goods – have an opportunity to differentiate themselves and gain a competitive advantage. Think about where you would fill up your gas tank if given the choice between real-time rewards with a one-card transaction and the common alternative.
Today’s loyalty programs must have some component of real-time redemption to meet rising expectations of immediacy by consumers. And this is just the beginning –the relevancy of standard redemption offers will diminish over time as real-time offers continue to expand.
Payments Leader from FIS provides insights on credit, loyalty, fraud and emerging payments strategies through blog posts from our industry experienced authors.