When we looked into developing the SignalMind Loyalty Program module, the first gut reaction was to go with the common approach of digitizing the offline version of punchcard-based, "buy 10 get one free"-type solution. However, after looking deeper into it and interviewing a few business owners as well as resellers, we've decided to take a different route. And here is why.
Points-based, not punch-based
In the old offline paper-based world punch cards seemed like the optimum solution for tracking purchases of frequent customers - anything more sophisticated would be tough to handle in the pre-mobile pre-internet era. Yet, with the new technical capabilities it simply does not make sense to digitize the issues that come with the punchcard-based loyalty program:
- Not every "punch" is created equal. A small cup of coffee is not the same as a large triple-shot latte. The value of a 60-minute massage is much higher than the value of a $20 manicure. Customers who spend more should be rewarded accordingly (if solely for the matters of good customer service). Loyalty programs that can only reward visits (or "units" bought) present a real challenge to business owners looking to recognize their customers fairly as well as encourage purchasing of higher ticket items.
- Limited reward selection for customers. Not every customer would be interested in the same reward, yet "buy 10 get one free" approach assumes the same reward for all. To capture interest of a wider range of customers, a loyalty program should offer multiple reward options.
- Issues with rewarding non-monetary actions. Besides buying a sandwich on a regular basis, your best customers can do a lot more for your business, such as bringing in a friend or sharing your business on social networks. Rewarding customers for non-monetary actions within a punchcard-based solution can be problematic. Would a tweet be rewarded the same as a visit? How can you be sure the customer is not gaming the system?
As a result, we decided to go with a points-based program, where customers are rewarded fairly and in line with what they spend with the business.
In addition, the SignalMind points-based program also allows a business to reward customers for non-monetary actions (such as bringing in a friend or social sharing).
Collecting stats and member contact information
Besides the obvious benefit of getting customers to choose your business over competitors, another hidden advantage of the loyalty program is visibility into customer behavior. Good stats and granular member list filtering mean opportunities for effective marketing campaigns (sending highly relevant and personalized offers). Therefore, in addition to collecting all the stats on member visits and amounts spent, we've added a granular reporting feature that allows you to:
- get a list of customers who have not been to your store in the last X number of months (perhaps they could use a coupon offer to come back?)
- see which customers have birthdays coming up
- get a list of your most loyal customers (who spend a lot and/or come in frequently)
- see what rewards are most popular with your members.
Being able to better understand what your customers are doing, as well as filter your member list for personalized marketing is really what this is about.
Multi-channel access
Some mobile loyalty programs make customers enter punches (with various security features built-in to prevent fraud). Some require that an employee takes the customer's smart phone to enter that information.
None of these solutions seemed elegant. Would I feel comfortable with someone else accessing my phone? Can the option of customers entering their own rewards data be abuse-free while still being viable in a fast rush-hour environment (with changing security codes and having to send notifications to employees with the new security codes)? Would the smart phone be the best medium for member registration?
We've decided to take the multi-channel approach and let business owners and clients (with your guidance) decide what device or device combination works best for them. With our loyalty program, store employees can log in on any internet-connected device (tablet, smart phone, computer) to enter points for customers. All existing members need to do is provide the store employee with their phone number (that serves as their unique identifier). New members can register for the program on their smart phones, or on a tablet set up in the store (or the store admin can add a new member).
Fraud prevention and security
When considering a customer loyalty program, abuse prevention is a top concern for many business owners. It is not just the "creative selling" aspects your clients need to worry about, but also employees giving out freebies to friends and family members, or themselves. Yet, introducing fraud-prevention mechanisms into any solution inevitably adds complexity and additional steps for customers and staff members to go through, often creating bottlenecks in fast-paced rush-hour situations where (literally) every second counts.
After careful consideration, we've come up with the following fraud-prevention features that don't compromise the precious time:
- Only authorized employees can enter points (by entering the purchase amounts that automatically convert into points based on the program configuration). They do so by using the existing member's phone number as an identifier, via any browser-based interface.
- The maximum authorized point (purchase) amount can be set by the loyalty program admin. Points above that amount are "red-flagged" and require manual approval by admin.
- At any point the admin can see points entered by any employee (to spot any irregular behavior, such as too many points entered by a certain employee for a certain member).
Flexible customization options
Some of our resellers have listed limited customization options is the number one shortcoming of the White Label loyalty programs they've tried in the past. As someone with an interactive agency background I tend to relate. Customization options (flexible branding, verbiage and additional features) are critical.
Therefore, forgive us if you find that a loyalty program requires many decision points, as setting up a loyalty program with SignalMind takes more than just a few seconds : ) But hopefully your customers will appreciate all the flexibility that comes with it, both functionality and visually.
We hope you enjoy the new SignalMind Loyalty Program module, and please keep the feedback coming as you explore and enable this functionality with your customers.
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Image credit: frugal-cafe.com