Many businesses have loyalty programs to connect with customers on a deeper level. Loyalty programs have long been considered a cornerstone of customer retention strategies for businesses across industries. These programs, often characterized by points, rewards, and exclusive perks, have aimed to foster long-term relationships between brands and customers.
However, the efficacy and relevance of traditional loyalty programs are in question, prompting businesses to explore innovative solutions to rekindle customer loyalty. One such solution gaining traction is card-linking technology.
In this article, we explore the reasons why traditional loyalty programs have been ineffective at driving customer loyalty and retention and examine ways card-linking can spark loyalty programs.
Loyalty programs are meant for businesses to engage with customers meaningfully and reward customers for shopping at their businesses continuously. However, not all loyalty programs are created equal. Companies invest approximately $2 billion annually in their loyalty programs, and yet, 77% of loyalty programs that solely rely on a transactional model fail within the first two years. Here's why:
Too much friction affects enrollment and engagement, resulting in poor results. Customers will choose to skip the program if they have to provide too much personal information. The lack of personalization found in traditional loyalty programs can hinder the emotional connection between a customer and a brand. Instead,
shoppers want to buy from brands that make them feel like individuals, not just transactions.
In short, it is hard for businesses to meet customer expectations, which can be costly. In a survey done by Yotpo, consumers made it clear that customer loyalty and retention cannot be won with cheap tricks and gimmicks, like overgeneralized messages and lacklustre loyalty rewards. The lack of meaningful rewards does not provide a sense of urgency to customers, as they can quickly start to feel disconnected from the program.
Now that we understand why traditional loyalty programs fail to boost customer retention let's see what characteristics of a loyalty program are important to customers. In a survey conducted by Salesforce, customers were asked why they would spend more time using a loyalty program. Here are the results:
It’s clear that customers value convenience and personalization. Customers want to spend less time managing their rewards and more time earning them.
Now, the question becomes: how can businesses design loyalty programs that remove traditional pitfalls and capture what customers want?
Enter card-linking technology—an approach to loyalty programs that aims to eliminate friction and enhance customer experiences. With credit cards used in 40% of in-store transactions, it makes sense for businesses to offer card-linking solutions.
Card-linking enables customers to link their existing credit cards to loyalty programs seamlessly, and the best part is that no banking credentials or other data are needed. The smooth omnichannel experience ensures that customers will be more likely to sign up for the program. Businesses can give customers meaningful rewards such as cashback, cashforward and round-ups.
Once linked, transactions made with these cards automatically accrue rewards in real-time, eliminating the need for manual intervention. This frictionless process not only simplifies the customer experience but also increases the likelihood of participation and engagement. Businesses can get their card-linked loyalty programs up and running in no time.
Card-linking and personalization go hand in hand. Everyone has different goals. Some would like to save money for retirement, and others would like to donate more to their favourite non-profit organization. Rewards earned through card-linked offers are directly linked to the customers' goals. Once a reward is earned, customers will get a real-time notification to track their progress.
Card-linking can provide the spark that traditional loyalty programs need. By being an all-in-one solution, businesses can earn customer loyalty more effectively. Businesses can save time and effort designing a loyalty program and leverage card-linking technology instead. 73% of card users say they prefer cards with linked offers. So why not provide customers with what they want?
Olive’s card-linking platform provides a smoother way for customers to earn cashback and cash-forward rewards, roundup for savings and investments, match donations and reach other financial goals. Provide customers with a better way to onboard with a simple card-linking solution that takes 10 seconds. Olive’s APIs not only provide security and real-time notifications but also come with a client dashboard to easily customize and launch programs.