Everyday consumers are reaping the benefits of brand loyalty points, as they can be used for future discounts or even free items, depending on how many points have been saved. For the brand itself, this is a great way to tie customers to their stores, and make them revisit the store every so often. But are we really using these loyalty points to their full effect? A recent UK study shows most loyalty points rewards are left unclaimed.
The concept of loyalty points is quite beneficial to both the store and the consumer alike. Stores can use these points – which are in a digital format, mind you – to entice customers to come back sooner rather than later. Not only will this help in building brand awareness, but it also boosts business overall.
Loyalty points make a lot of sense for consumers too, as they are “rewarded” for shopping at specific locations. In return for doing so, these loyalty points can be used for discounts or other rewards during their future visits. A closed ecosystem is created, and everyone seems to be getting along well.
But this is where this illusion comes to a grinding halt, as most consumers save up loyalty points to never spend them in the end. A large part of this problem is chalked up to the consumer not bothering to spend their loyalty point balances, but the retailers are also at fault for not reminding customers they have discounts available to them.
In total, loyalty points worth billions of GBP remain unspent on cards, which is quite a staggering amount. This begs the question whether or not loyalty points schemes are a feasible business strategy, or if a new solution has to be implemented sooner rather than later. Losing track of what amount of loyalty points belongs to which brand has become a nearly impossible task for everyday consumers.
There are several solutions to tackle this problem. The most obvious solution would be to build some form of notification system for consumers. This way, they would receive an email or text message every time their loyalty points balance goes up, which should help them spend these points more quickly.
A more convenient solution comes in the form of directly offering everyday consumers discounts at their local stores. Every time a customer makes a purchase, they will receive a tally discount once all items have been scanned. This will also help brands to establish a better relationship with their customers, as one chain might give larger discounts compared to the next.
Offering discounts in this time of financial turmoil is not an easy task for brands and retailers, though. One way to address this issue is by enabling alternative payment options, such as Bitcoin. Doing so would allow the retailer to save money on every transaction, and use this cost-cutting measure to offer discounts to its customers.
What are your thoughts on loyalty points? Do you spend these points regularly, or haven’t you checked the balance in quite some time? Let us know in the comments below!
Source: Telegraph UK
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