Gone are the days of punch cards and paper coupons. Paperless and card-less membership is the direct result of the past decade’s technological transformation. Businesses are now engaging loyalty programs through mobile apps and unique member identification. Although this advancement streamlines loyalty programs, it also makes the intricacies of loyalty far more complex.
The operation of loyalty programs has become far more personal than ever before. Now, your local coffee shop can process your local coffee order automatically once you’ve recited your mobile number to the cashier.
In 2015, 84% of Australians enrolled in at least one loyalty program1. In exchange for customers’ information, loyalty programs have transformed into a powerful marketing technique which are saving Australian businesses millions of dollars each year on outdated marketing tactics.
Consequently, members are expecting more in return when it comes to loyalty. 78% of Australians who join membership programs expect immediate price discounts when making purchases. Similarly, 64% anticipate a surprise gift or reward without having to actually make a purchase2.
Loyalty programs can now be closely monitored to track consumer habits and customer satisfaction, whereas before, they were just a nice incentive to encourage repeat-business. This advancement means that businesses can get to know their consumers better. Consequently, communication between retailer and consumer becomes more targeted and relevant.
However, businesses must first understand their customers to know how to appropriately implement a loyalty program. According to Directivity, there are three motivations of loyalty: convenience, transactional, and emotional3. Understanding consumers’ motivations assists businesses in customising their loyalty programs for the better. After all, there is no use in developing a loyalty program if it doesn’t reflect the relevant consumer attitudes!
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1 Membership of a Loyalty Program, Directivity, 2015
2 In 2015 some program benefits are moving up the ranks, Directivity, 2015
3 The 3 Motivations of Loyalty, Directivity, 2015