The 21st century has laid the groundworks for a thriving and successful business. It is easier now than it has ever been to make it big with an original idea and some financial backing. However, the simple steps one has to take to start a business are, in some ways, a double-edged sword. Because anyone can make it, anyone can try, which results in an incredibly competitive scene.
The big businesses and corporations are, for the most part, safe. However, all that means is that smaller markets have to compete even harder among themselves. For that reason, a entrepreneurs have come up with the concept of loyalty programs. But, just what are loyalty programs, and how has the idea evolved in the digital ear.
What is a Loyalty Program?
Customer loyalty programs, most often called simply “loyalty programs” are a trend among service-providers to give something back to their customers. An excellent example would be the iGaming industry, which consistently provides new and exciting bonus offers to new and long-term users. Sure, casino signup bonuses are a great way to start playing slots online, but what about people who’ve been using the site for a long time? Loyalty programs are a way to make sure that they are happy.
It isn’t just iGaming that is putting loyalty programs to use. Even land-based businesses often run some kind of program to entice buyers to return. The most popular example, which many might not even think of as loyalty programs, is the introduction of coupons in big super markets. Through coupons, loyal customers can get good deals on certain items that would usually be out of their financial reach. However, to get a coupon they either have to be consistent customers, or reach a certain threshold on the bill.
The Origins of Loyalty Programs
The truth of the matter is that loyalty programs are not as new as some might imagine. Picture a local green market, where the entire neighborhood congregates. You might have a good rapport with the local farmer, who often gives you a few extra vegetables. Or perhaps you are old friends with the local butcher, who cuts a few extra grams of meat whenever you roll by. While these may not be loyalty programs as we define them, they are gestures of appreciation that a business is expressing towards a loyal customer.
However, a big-brand super market simply does not have the same rapport with their customers. It is impossible to remember the hundreds, or even thousands of people that pass through the store on a daily basis. That is why, big businesses have to get creative with their show of appreciation. One of the earliest customer loyalty programs were punch cards, which the cashier would stamp every time a customer made a significant purchase. For a while, the punch cards were an incredibly effective marketing tool.
However, the digital age has changed quite a lot. In the era of the internet, artificial intelligence, virtual and augmented reality, and e-commerce, punch cards just simply won’t do. Or rather, they certainly need an update. The great news is that quite a few businesses have found ways to build upon the old-school methods of ensuring customer loyalty. So, let’s see how loyalty programs have evolved in the digital age.
Electronic Cards
The most obvious way to replace a punch card is to simply issue an electronic version. A thin sheet of plastic that accumulates points with every purchase. Customers can then use said points to get discounts on certain products. We are seeing this practice more and more in super markets, particularly large, national or multi-national chains. However, it doesn’t just stop at super market.
Electronic goods stores, airline companies, and even certain hotels have hopped aboard the bandwagon with great success. Getting a good deal on a necessary household appliance can literally save a family, and for people who frequently travel, an airline company membership program can help to save quite a lot of money. So, electronic cards are certainly a welcome evolution of classic punch cards.
Mobile Apps
But, why have the card at all, some might ask. In the era of the smartphone, it truly is unnecessary. If you can believe it, a lot of businesses have thought the same thing. With the accessibility and popularity of smartphones, there really is no reason why one would need a card to get their loyalty program benefits, when they can simply download the business’ official app, and prove their membership.
In 2024, a lot of businesses have actually made it possible to become a member through the app directly. Once the app is activated, all the customer needs to do is pull out their phone, show their membership, and allow an employee to scan the app. In an era of digital wallets, it no longer is necessary to carry a real one. Everything you need is right there on your smartphone.
The Future of Loyalty Programs
To think that we’ve hit the peak of loyalty programs would simply be untrue. Right now, many businesses are doing their best to come up with a brand new idea or an innovative concept to thrill their customers, and ensure their consistent patronage. Some businesses are incorporating artificial intelligence in order to design more personalized and unique loyalty programs. Imagine a world where every individual customer would get unique benefits, depending on their spending history. It almost sounds like something out of a science fiction novel.
Giveaways have also been a big part of the history of loyalty programs. However, they often do result in customers getting a gift that may not suit them, or that they may not enjoy. For that reason, a lot of companies are investing in purchasing predictions, which is again possible through machine learning algorithms. Technology in general is of great help when designing a loyalty system. As the years pass, digital and industrial tech become better, so who knows what the future may hold for both businesses and customers.
