Role of Digital Technology of Loyalty Programs

By | February 16, 2019

Many big retailers have initialed customer loyalty programs with the intention of improving their profit by indulging their loyal customers. Let us examine the advantages of digital loyalty programs and have an idea of how digital technology is being employed in the retail sector.

Advantages of Digital Technology

The main goal of any business is for more sales and making customers attracted to their products so that they remain loyal to them. Having more consumers naturally means more sales and obviously, more profit. Loyalty programs help businesses to achieve this in many ways.

When any purchase is made, consumers like to feel that they are getting “true value” for the money spent. With the unstable economic situation in the past few years, this has become more evident as consumers often find it difficult to have spare cash for unplanned purchases. Targeting consumers with loyalty programs and other benefits attracts them to shop more frequently. This increase in the shopping visits of customers means a lot to retailers. Moreover, if their consumers are planning to make use of a free offer or a free purchase by utilizing their loyalty points, then they will have an added incentive for making a bigger purchase than they usually do.

Besides increasing sales from the already existing consumers, loyalty programs also help to attract new customers. Consumers who feel that they are well taken care of and receive benefits and value for their purchase, are sure to tell their family and friends about their experience with the product – word of mouth should not be underestimated and is a huge positive for retailers.

Without doubt, the greatest asset is the data that is collected about the spending habits of the customers. Tracking the popularity of the products – details like what sells in the morning hours, what is popular for less than 25 age group, what combination of products will help for combined selling, etc? All this data will help to target marketing strategies that will increase sales even more. If a consumer is seen to usually buy vanilla pretzels, then you can immediately target them with an attractive deal with that precise product!

Going Digital All the Way

Mobile phones and tablets have proved to have an enormous impact on loyalty programs in the retail market. Customers look for a convenient app to help them shop from their favorite shops, so that they can be saved from the hassle of carrying plastic cards with them. These apps will usually display the details of the customers’ loyalty card which are just scanned when they make a purchase at the shop. The app will also help the retailer with various marketing possibilities. Push notifications, store locator’s. Social media links and promotions, etc. can be incorporated helping with the customer with a whole lot of information at the click of the button! Consumers can be given reward points for interacting in the social media like Facebook “likes” or rewarded with double points on their birthdays – the possibilities are endless!

A Digital Customer Loyalty Programs can easily fit in the broader framework of any marketing strategy. Mobile promotions, music downloads, skins promotions, etc. do not replace or disturb the advertising channels – on the other hand, they complement them by giving them more leverage. Digital promotions help the company to reach into a targeted market, thus improving brand awareness to attract valuable market data and encouraging consumer loyalty.

There is no doubt that in the past few years, digital technology has had a huge impact where spearheading broad marketing tactics and campaigns. There is nothing more attractive than digital promotions when it comes to effectively generating consumer response. They have proved to be cost-effective and an effective promotional tool where the consumers are given top awareness of the particular brand of product. Digital technology not only encourages long-term sales and consumer loyalty in the retail sector but also help to achieve targets while safe-guarding the profit margins.