In 2021, companies will spend up to 70% of their marketing budgets on digital channels (Gartner, 2021). At the same time, there may be a lot of room for improvement in marketing optimisation, for example when loyal customers are not digitally identified. Pomoell points out that it should be possible to target ads based on whether the customer is new or returning.
"If the same advertising is shown to loyal customers and new target groups, the conversion rate is likely to be lower."
Pomoell knows that in many organisations, a digital loyalty programme is on the drawing board, but its profitability may be in doubt.
"Companies are understandably concerned about the willingness of customers to change or the size of their investment. A development project should not start without accurate profitability calculations and an understanding of customer behaviour. The value of an existing customer base is often greater than imagined."
Pomoell says that implementation must also take into account the profitability of technological choices.
"You should choose a partner with experience in similar projects. They can propose the most cost-effective solutions which can also be used in a variety of ways. For example, the authentication used by HiQ is not tied to us as a supplier, so the standard solution can be used on its own, even in an online shop implemented by another party."
The digital loyalty app as the basis for a seamless customer experience
According to Pomoell, the success of a digital loyalty programme depends on how well the customer's needs are understood. He points out that this is not a question of directing all sales to online channels, but of strengthening seamless service experience through all the channels.
"A digital loyalty app is a way to direct the customer to the channel that is most useful to them at any given moment. For example, the app can be used to send out information about exclusive in store loyalty offers. The most important thing is that details such as customer data and bonuses are collected centrally, regardless of the sales channel."
Pomoell describes that sometimes in practice, the inability to provide modern loyalty model might even mean that a customer who arrives at a store, branch, or restaurant, would need to place an order online to receive the benefits.
"Customers don't want to be bounced around, and the threshold of switching to a competitor is low. Loyalty benefits must be available regardless of time and place. Nor can we expect today's customers to carry several different loyalty cards with them when they can also pay by mobile."
Pomoell says that the Levi Ski Resort is an inspiring example of how customer data can be used for business purposes. Customers earn points for all their purchases, whether it's equipment rental, ski passes, ski lessons, or restaurant visits, and receive benefits of monetary value. The app can also be used to provide up-to-date information about events or campaigns in the area.
"The most important thing is that the loyalty programme creates added value for the customer. Levi Ski Resort has done a fantastic job. A week's skiing trip for the whole family already generates significant savings when all purchases are centralised. The app will also improve the visitor experience and make shopping easier, as information about services will be provided centrally."
The benefits of a digital loyalty programme in a nutshell:
1. Digital marketing is more optimised, as loyal customers are not targeted with advertising designed for new customers, for example.
2. Loyal customers can enjoy their benefits regardless of the time, place, or channel. The bonus balance can be easily checked on mobile.
3. Customers have control over their contact details and the way they want to be contacted.
4. No need to carry a loyalty card or discount vouchers; everything is on the phone.
5. The digital storing of warranty receipts and purchase history makes the customer's daily life easier.
6. Additional sales, as well as ordering spare parts and service, is made easier, as the customer does not have to remember which device they are using, or the name of the food they ordered the last time.
Interested in a digital loyalty programme? Contact us, and let’s assess what kind of implementation would be best for your business.