From coins to cards to apps: loyalty in business takes on a new form

The retail market has become so competitive that loyalty and reward programmes are widespread and are adapted to suit current market conditions, says Frik van der Westhuizen, marketing director at LoyaltyPlus.

Johannesburg, 26 Nov 2018
Read time 2min 20sec

Both e-commerce and bricks-and-mortar companies are exploring various channels to not only retain current customers, but attract new business. The retail market has become so competitive that loyalty and reward programmes are widespread and are adapted to suit current market conditions.

These programmes are now much more than a mere once-off merit or point-based offering, says Frik van der Westhuizen, Marketing Director at LoyaltyPlus, a leading independent customer relationship management (CRM) company.

"These programmes are now very much linked to brand strategy and development. It is about doing business in a customer-centric ecosystem, which is extensively based on customer or user experience and personalisation of every touch-point in the trade process," says Van der Westhuizen.

He states that loyalty-based programmes can be traced back to the mid-19th century when US traders issued their customers with copper tokens that could be redeemed for future purchases. These evolved into stamps and box tops, and eventually into the more modern form of loyalty programmes.

Iconic brands, from Starbucks to Uber to Subway, and everything in between, have structured their loyalty or rewards programmes to defeat their market rivals and 'capture' the customer.

"History shows that during the 80s, consumer loyalty offerings like frequent flyer miles and time-share, became increasingly popular... it was in the 90s when card-based retail loyalty programmes caught on and retailers were looking to leverage foot-traffic and secure return business," Van der Westhuizen says.

Digital communications and the growth of cloud architecture in business has once again triggered a change in loyalty-based programmes, especially how they are channelled to the market.

"We're no longer talking about individual loyalty programmes or offerings in isolation... today, it is more about loyalty strategy in business. Retailers are now using digital resources like social media to reward customers for their business, and offer incentives to build their customer bases," Van der Westhuizen adds.

The introduction of mobile technology and apps has also revolutionised customer interaction. Today, the retailer or merchant has the means to engage a mass audience of customers directly and immediately in real-time.

As LoyaltyPlus explains, digitalisation has enabled businesses to personalise their offerings to customers, to bring the customer into the process and empower them to take ownership of engagement with their brand of choice.

"We are now in the fourth industrial revolution and customer engagement or relationship management has had to keep up with consumer demand. We are excited to witness the growth and development (and innovation) that has been applied to retail and trade today," Van der Westhuizen concludes.


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