Customer loyalty programs often need to catch up in engaging customers. However, with card-linking, retailers and merchants can design more effective...
How retailers can design card-linked offers to increase customer loyalty
Dive into how card-linked offers are improving customer loyalty programs by providing more meaningful rewards that matter.
It has become increasingly difficult for retailers to attract and retain new customers. Loyalty programs are designed to tackle this problem. Unfortunately, not all loyalty programs are very effective. In fact, about 77% of transaction-based loyalty models fail within the first two years.
One reason why loyalty programs fail is because the incentives created in the loyalty program fail to line up with customers’ values or wants. However, incentives and customer wants can be difficult to align with traditional loyalty models.
What if there was a way to construct more meaningful, personalized and frictionless loyalty programs? How can businesses build a stronger loyalty program that their customers actively engage with? Card-linking is a potential solution that reduces friction and goes a long way towards aligning customers values with program incentives.
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What is card-linking?
Card-linking is the process of connecting a primary card to a card-linked program. Customer purchase data can be securely tracked to know when a rewards criteria has been met. Once met, the reward will automatically be recognized to the cardholder without any additional steps. The process is simple and frictionless, allowing for customers to onboard within minutes and to continue using their primary card - they no longer need to be issued or carry around multiple loyalty cards to earn rewards.
Card-linked offers stand in contrast to traditional programs because they don’t need extensive customer sign-up, any new card issuance, a separate card to participate or rewards lag.
For example, a popular loyalty model is the points-based program where customers earn points for each purchase. The points program faces some issues that reduce customer acquisition and retention. Firstly, the amount of points needed for a reward may not feel attainable for customers. In fact, research shows that customers may not want to spend their points in order to get a larger reward, reducing active engagement. Secondly, they may even feel a sense of guilt for depleting their accrued points, especially if the reward is not the one they intended to receive in the first place (Smith, Sparks, 2009). Thirdly, the program can be costly for businesses as it requires staff training, requires additional time to set customers up, and the company has to take on the balance sheet burden of points accrued.
CLO programs with rounding and cashback rewards are changing the landscape of customer loyalty and engagement. With card-linked offers (CLOs), customers can set participation goals, and businesses can engage with them. For instance, in a CLO rounding program, customers can set a goal for their next big purchase - perhaps a television or a couch. With every purchase, customers can round up their spare change to dedicate towards that purchase. Businesses can be informed of this, and offer rewards or cashback that bring that customer closer to their goal - aligning both of them. As a result, customer engagement can be supercharged.
Benefits of card-linked offers
- Simple and easy for retailers to set up.
- Quick and easy for customers to onboard.
- No need for any physical or digital coupons.
- Customers can earn rewards in real-time
- Allow customers to track their rewards in real-time
- Help set goals to help customers reach their goals
- Supercharges customer engagement
- Increase customer acquisition and retention
Make your customer loyalty program more impactful with roundups
Loyalty programs are not new, but designing an effective program that boosts customer retention can be difficult. This is especially true during periods of rising costs and economic uncertainty where consumers start to reduce their spending.
The main issue many retailer loyalty programs face is getting their customers to sign up, stay signed up and actually use their points. The reason why roundups are effective in mitigating those issues is because of the frictionless experience. In fact, about three-quarters of consumers expect to have a consistent and smooth omnichannel engagement with the brands they shop with. Customers do not need to think about rounding, it will automatically be done after each purchase.
Retailers can incorporate rounding with their loyalty programs to help promote engagement among their consumer base. For example, if a consumer makes five roundups, the retailer will match their next roundup up to a specified amount. Brands can also offer additional rewards, discounts or even free items - the possibilities are endless. By providing the tools to help your customers save money, it will help increase customer loyalty and overall engagement.
How cashback rewards can help increase loyalty
Card-linking and cashback rewards complement each other to extract the most value for customers. Cashbacks are nothing new, where customers can earn money from purchases they make. However, typically these cashbacks would require a specific loyalty card. With card-linking, customers can use their primary card to start earning cashbacks from their purchases.
Another great feature of card-linking and cashback rewards is that the cash will automatically be earned once reward criteria has been met. For example, if the reward is 2% cashback on purchases made over $50, the reward will automatically be calculated and rewarded to the customer once the purchase is made.
Olive’s approach to card-linked offers
Unlike other platforms, Olive focuses on providing benefits not just for the retailer and brand, but also for the merchant partner. We do this through flexible configuration options that allow businesses to reward new and returning consumers. Olive is here to converge goal alignment between retailers, merchants and customers by making it easier to implement a frictionless program that is more accessible for customers. Whether it's implementing rounding or cash back rewards, Olive can help your loyalty program stand out.