Loyalty programs have to be among the most loved and the most hated things in the shopping universe.

How could they not be?  Some consumers love the loyalty program to the point they won’t make a purchase unless there are points and rewards involved; others treat them with complete disdain.   Crossing socio-economic barriers, it’s not just the “poor people” who are looking for loyalty rewards when they shop.

Quite the contrary.  I’m sure that you, just like me (and everyone else) knows a guy who travels a lot, and not for business.  This guy isn’t an airline pilot, and he’s not a private jet owner but he always seems to be sitting in first class with the wife and kids everywhere they go, like that trip to France you’ve heard about for the past two months…

Choose your loyalty program options wisely.

Loyalty is something that can (and should) be easily transitioned to mobile devices.  While it’s great that a consumer can use their phone number to sign in at the cash register, it’s not really doing the loyalty program justice from the merchants side of things.

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Many small business loyalty programs don’t offer advanced statistics on consumer purchasing, or isn’t tied into “active marketing” of loyalty program offers for members.

What is active marketing to loyalty program members?

Loyalty program marketing can (read: SHOULD) include an active marketing component – one where the merchant delivers specific offers to consumers, perhaps including personalized offers based on previous purchases.  Active marketing includes sending offers in email, via SMS, snail mail, or location triggered lock screen notifications directly to smart phone screens.

Passive marketing is more along the lines of putting up signs in the store, or including offers on print ads, radio, or tv ads; we call these passive because there’s no way to know who sees the ads, who responds to the ads, etc without doing more sophisticated response management.

Why should a merchant care about the delivery method when marketing to loyalty program members?

There are a couple of reasons here, the primary one, in my book, being contextual marketing.  Just having a customer in a database and tracking what they bought doesn’t really do you, as a merchant, that much good.

Let’s say you’ve (perhaps mistakenly) stocked two hundred sweaters, and while they looked (again mistakenly) good to you at the apparel show, now they’ve proven to be complete dogs and no one wants them.

If you were using mobile wallet advertising as a component of your loyalty program and overall mobile marketing strategy, you could devise a slick contest that would enable customers to purchase the ugly sweaters at a deep discount, take a picture of themselves wearing said ugly sweaters, post the pics to Instagram, and award a winner some other great (um, yeah, we’ve seen your taste) prize – maybe you’ll stick to a gift card (oh, yeah, that can also be done with mobile wallets) for having the wackiest photo wearing one of these ugly sweaters.

[READ: The Mobile Wallet is a Marketing Channel]

Otherwise you’ll be donating the ugly sweaters to Goodwill, taking the write off, and while there’s certainly nothing wrong with Goodwill, that tax swap isn’t nearly as sweet as having loyal customers buy terrible stuff, take pics of themselves with it, show it to their friends and try to win prizes.  The fun factor is certainly not the same in the Goodwill option…

I’m not the only one that believes the loyalty program and the mobile wallet are a match made in heaven.

As a matter of fact, Bloomberg agreed with me last week.

Customers who use a store’s loyalty program tend to shop there more frequently and buy more each time; and about 70 percent of consumers are likelier to join a loyalty program if their points and rewards become immediately visible on their phones

Of course, I tend to look beyond the points counting (as you can see from my ugly sweater example above), and head straight to the profit center of the matter.  And the profit center is NOT always about the merchant profiting.

Having an interactive loyalty program that uses lock screen notifications to encourage customers to participate in all manner of games, contests, redemption schemes, and in-store events is one way to stay in the front of a prospective customers mind, while giving them back something of value for being a loyal customer.

So what’s the takeaway here?

Everything doesn’t revolve around price, and the more fun you can introduce into your relationship with your customers, the more time (and money), they will spend at your establishment.

 

Not rocket science, that’s for sure.