In the digital age of increased competition and heightened customer expectations, businesses must be proactive to stay ahead of the pack. Mark Jackson, Head of Financial Services at the Collinson Group, explains for CEO Today.
Keeping ahead in business is like trying to go up on a downwards escalator. If you run, you go forwards. If you walk you don’t move, and if you stand still you go backwards. Customer loyalty is hard-earned and easily lost, so CEOs must take stock to see the bigger picture and think about how effective the business strategy is at meeting customer needs. If the customer experience is not at the forefront of the agenda in boardroom meetings, then it should be.
Immediate and excellent service is now viewed by customers less as a welcome bonus, and more as a prerequisite to any business interaction. Finding new and innovative ways to engage and reward customers for their loyalty is essential for businesses wishing to meet sky-high expectations of consumers in the digital economy.
The customer of today expects personalised services from businesses in the same way that they expect the apps they use day-to-day to be tailored to them. They hop in an Uber to get to work, shop on their iPhone at lunch, order dinner on Just Eat and spend the weekend at a quaint Airbnb out of town. The integration of tailored technology into our everyday lives is seamless and pervasive.
The evolving levers of loyalty
Businesses must now do more to keep customers on board, and communicate to them that they are recognised and valued. Almost every business wanting to increase sales or build customer loyalty will have considered using vouchers at least once. In years gone by, people would happily scour newspapers and magazines, clipping vouchers for deals and offers. But in today’s digital age most customers do not have the time or patience for that.
There have been many attempts at digital vouchers, from customers downloading offers and printing out vouchers, to showing a text or QR code on their smartphone at the point of sale. However, these are cumbersome methods and bring their own issues including customer and till friction and the need for staff training. But research has show that over half (56%) of the global affluent middle class (the top 10% of earners) feel more loyal to brands that know who they are and treat them differently.1
So how can businesses build loyalty and encourage repeat sales in a manor befitting the 21st century? Step in the card-linked offer.
New kid on the block
More than just a voucher for the digital age – card-linked offers (CLOs) enable organisations to drive loyalty, but also better understand customer behaviour. Having opted in to the CLO programme by providing credit or debit card information, an offer can be loaded directly onto the consumer’s card and then automatically redeemed when they pay. The offer itself can be paid as loyalty rewards, or as cashback on to their card statement. For example, an offer of a 10% discount with a retailer could be loaded onto a person’s card, then after making a purchase with that retailer, the customer would automatically receive a 10% refund onto the same card once the payment has cleared. It’s great for the consumer and the merchant because it is completely frictionless, which makes a big difference.
Collinson Group research into the global affluent middle class revealed that 59% would spend more with a brand if it offered a loyalty programme where it was easy to earn and redeem rewards. CLOs have evolved to become a key element of a loyalty programme – boosting customer engagement for retailers, airlines and financial institutions across the globe.
CLOs also have the ability to link a customer’s online and in-store purchase behaviour. They enable a brand to see if an offer made online, through an email or social media for example, was redeemed through a purchase made in-store or online. This attribution plays a vital role in measuring and driving online and in-store continuity. It also appeals to customers – Collinson’s research revealed that 60% of those questioned want to be able to earn loyalty currency both online and in-store. Card-linked offers can play an important role in meeting this demand in-store, seamlessly and effectively.
Finally, CLOs provide an abundance of valuable data. Leveraged effectively, brands can use the insights to deliver more personalised offers and experiences for customers – which will drive loyalty and increase engagement. In the US, 78% of internet users said personally-relevant content from brands increases their purchase intent, according to a OneSpot/Marketing Insider Group survey.
Through card-linked offers, the humble voucher has entered the modern age, helping businesses in highly competitive markets to better understand and reward their customers, as well as increase sales and boost loyalty.
Leading from the front
Embracing technological change is an effective way to stay ahead of competition and engage tech-savvy customers in the same stroke. Business leaders should look to innovations such as CLOs to help them adapt to rapidly changing customer expectations that are themselves guided by the proliferation of technologies in our everyday lives, all of which is increasingly personalised and designed with the end user in mind. Rewarding customers for loyalty is of course an effective way to encourage it in the future, but just as important is understanding the customer base; their desires, wishes and habits. Integrating CLOs into a wider loyalty offering can help businesses achieve both these ends simultaneously to ensure you have your finger on the pulse.
 Independent research was conducted by SSI Research in Singapore during January 2016 on behalf of Collinson Group. 6,125 consumers within the top 10-15 percent of earners in Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom, the United States of America and the United Arab Emirates were polled online.