Loyalty marketing includes tools that help marketers engage with consumers. Here are some pros and cons of digital mobile wallets, in-app rewards, blockchain-based loyalty programs, AI-based loyalty marketing and mobile devices with beacon technologies.
·
1. Digital Wallets, Great Organizers of Financial Lives
According to recent data, the average American carries 17 cards. This clearly shows how important it is for consumers to have an overview of their financial life (including their different loyalty programs). Digital wallets are ideal to help customers organize their financial and loyalty products.
2. In-App Rewards: a Loyalty Marketing Tool
The digitalization of reward programs can be an important driver for customer engagement. However, most In-App Rewards are based on a gamification context.
Pros:
- Rewards for better prices, discounts, special offers. In other words, this type of technology can leverage the value proposition to customers.
- Makes feel your regular customer as a high-value customer, that fact can generate effective recency/frequency and at least more interaction with the brand.
- Churn strategies; getting back old customers / capture new generations and/or new markets.
- Leverage Ancillary Revenue / Check-in ratio / Leverage negative performance markets or flights.
- Incentives for B2C markets.
- Differentiation from competitors.
Cons:
- In-App can be very strong to generate engagement but also challenging to generate revenue.
- Potentially low ROIs due to high operation costs (IT, back-end, front-end).
3. Blockchain-Based Loyalty Programs
Blockchain is a powerful strategy for loyalty marketing because of its inherent safety. The most valuable asset of a loyalty or Frequent Flyer Program is the data. Blockchain is designed to store transactional data in a secure and decentralized way. Customers appreciate this model because it is a “Loyalty Hub”. This technology can simplify the process of applying and keep customers from having full wallets/apps or accounts/passwords with the brands they want to interact with.
Pros:
- High redemption rates.
- Analytical and statistical information / more accurate information / give the customer what they need, when they need it and at the right price.
- Customer incentive oriented: “Buy what you need and I’ll reward you”.
- Traditional loyalty programs reward you for the extra purchase when customers realize that is a problem. Here the information is secure.
- Loyalty Hub: customers always appreciate simple and centralized platforms.
- Points can be changed for cryptocurrency.
Cons:
- Complex method.
- High UX costs.
- High consulting costs.
- Blockchain technology may not yet be popular enough.
4. Artificial Intelligence
Nowadays is not enough to get customers and generate leads from e-commerce strategies. It is a must for companies to start being AI and Machine Learning oriented in some way. This is not a trend, but a real need. Brand marketers and loyalty marketing experts are looking for deep learning experiences that allow recording and auto-analyzing customer information. AI can enable an extremely high degree of personalization. To get the most out of AI it is important for managers to understand market behaviors, customer preferences, demographics, etc.
5. Mobile Devices with Beacon Technologies
Frequent flyer travel programs or loyalty coalition programs are common currency in the travel and lifestyle sectors. These programs provide customers the opportunities to use/redeem the points (virtual coins) they win in the regular day-to-day shopping to acquire plane tickets, accommodation, car rental, ancillary airline products, etc. Beacons allow these programs to be farther reaching and help opening new markets, generally abroad.
