The importance of a strong loyalty program

A good loyalty program can lower your customer retention costs, increase customer satisfaction, boost your reputation, and boost your sales. They serve to incentive new customers to stick around by creating a mutually beneficial shopping experience, and they ensure that existing loyal clients feel valued. Studies show that it can cost five times as much to keep an existing customer as it can to acquire a new customer in the first place, so a standard loyalty program is an obvious solution to mitigate costs… right? Maybe not.

The problem

Traditional loyalty schemes can quickly become a financial liability, and most businesses do not realize the true costs of their loyalty programs. According to Deloitte Research, less than half of consumers take full advantage of their loyalty rewards. Point-based programs are becoming commoditized, and it’s harder for businesses to drive participation. After hiring the data analysts and necessary staff to test and develop a successful loyalty program, the loyalty program can cost much more than it produces. In addition, the outstanding redemption costs on a business’s balance sheet can be difficult to track and to solve for this, most loyalty programs come with expiration dates. This may be effective in clearing the balance sheets, but it detracts from the very purpose of the program, which is to provide added value to the loyal customer.

In the eyes of consumers, the promise of loyalty programs is the rewards. So, it stands to reason that if they are not able to redeem points, they may feel that the promise has gone unfulfilled. According to a 2017 report created by Bond Brand Loyalty, participants who actually redeem a tangible reward are twice as likely to be satisfied with their programs than non-redeemers, and only one-quarter of loyalty members are very satisfied with the level of effort required to earn the benefits.

On top of this, most loyalty programs come with nothing more than a plastic card. This leaves room for confusion and makes it difficult for consumers to keep track of the rewards that are redeemable to them. According to the Bond report, 57% of members don’t know their points balance, and 38% are unaware of their points value.

The solution

With the rapid disruption of technology and consumer expectations, it is imperative for businesses to adopt a loyalty program that is agile and flexible in order to keep up with the digital age. It no longer makes sense to use twenty different plastic cards for loyalty programs that could all be managed online, or on our phones.

Online retailers have led the way in providing consumers with experience-based, relevant, and personalized rewards systems but the majority of companies have yet to develop the necessary analytical capabilities to do so.

Rewards.com provides a complete, friction-less loyalty program that benefits both businesses and consumers. The RWRD token is a decentralized cryptocurrency that acts as a universal loyalty point, which consumers are able to redeem from top merchants on Rewards.com. This system provides for simple and efficient accounting, as all RWRD tokens are visible on the open ledger of the Ethereum blockchain. Thanks to the blockchain, the RWRD system is also safe from fraud and tampering. Additionally, RWRD tokens are easily managed in a single wallet, and they do not expire so a customer will never feel cheated out of their benefits.