By Rijish Raghavan
The dual event of demonetization and the Covid-19 pandemic has accelerated the adoption of digitization and digital payments in India. The cashless economy, previously seen as an emerging alternative, has suddenly become a mainstream phenomenon. However, the pandemic has also brought with it the harsh reality of a volatile and uncertain economic environment for all, and businesses in particular, forcing them to shift strategy and focus more on customer retention than on acquisition. of customers.
The change in approach has put the emphasis back on customer retention as a true long-term strategy for business models to withstand all weather conditions. Loyalty operates on the premise that sustainability is built by acquiring customers at a sustainable cost and retaining customers through continued engagement, superior experience and meaningful rewards. Adopting data-driven marketing with hyper-personalization will remain the key to maintaining consumers’ affinity with the brand. Loyalty programs are thus designed to serve as an influence on customer loyalty.
A PoS level loyalty program will involve the integration of transaction data via PoS or QR code, and customer specifics from the loyalty program database. This is because although merchants can view transaction data when accepting digital payments, the customer’s identity is withheld. It is the integration of loyalty that can give details of the identity of the customer and, therefore, enable merchants to deliver a better experience to customers.
As we move towards a more digitally responsive society, customers don’t just expect to be recognized by their favorite brands; they also expect to be fully engaged and rewarded. According to a Bain & Co study, a growth in customer retention of just 5% leads to an increase of at least 25% in profits; and loyal customers spend an average of 33% more per order than new customers.
It is recommended to complete payment transactions (either online or by PoS machine / QR code) with a loyalty program. This will prove to be a win-win for all, as merchants ensure greater customer loyalty and customers earn reward points which can be redeemed in future transactions for additional discounts, vouchers, or used to choose a product. of their choice.
The right rewards
For customers, the strongest connection to a business or brand is personalization. According to a 2018 consumer survey by Epsilon, nearly three-quarters of consumers in all industries are more likely to make a purchase when brands offer personalized experiences. Along with the facilitation of payments, diversification into financial services, such as granting credit to customers or offering payment flexibility, is gaining ground towards the creation of an evolved ecosystem to keep loyal customers and simultaneously foster the acquisition of new customers.
There are practical advantages to using mobile or digital loyalty programs. Digital loyalty is about building a data analytics dashboard with integrated marketing campaigns based on a customer’s transactional data. It can be integrated with artificial intelligence (AI) and machine learning (ML) to predict customer behavior or segmentation. So every time customers make a payment on a PoS machine or through a digital payment facilitator, they automatically get their loyalty points and the transactional data is linked to the customers.
This way, merchants can start to identify the buying habits of customers, like how many times they visit a store or if they haven’t visited it in a while, and send them a free reward. to win them back.
A successful loyalty program will ensure the acquisition of new customers and keep them longer, and, at the same time, find new ways to engage and reward existing customers. This will encourage customers to stay on board and drive further recommendations for the brand through social media and word of mouth, ultimately improving brand recall and value. Loyalty is always a good cost for sustainable growth.
The author is CEO, PAYBACK India
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