Today’s consumers are bombarded with constantly changing array of loyalty programs and mobile apps from nearly every merchant with whom they do business. In fact, U.S. consumers currently hold 3.8 billion loyalty program memberships and the restaurant and convenience store (C-store) verticals are no exception to this market saturation.
As a rule, most large chains default to using the classic “points-per-dollar” model where consumers earn points for every dollar they spend. Consumers can then redeem those points for future purchases. Ultimately, this results in simply discounting customers’ existing behavior. While it is a nice gesture, it does little to drive behavior or increase brand loyalty because those consumers are already a chain’s best customers.
Some loyalty programs will also include coupons, promotions, and “special” or “limited” offers (e.g. “Buy 1 – Get 1” or “10% off”). But one of the challenges every loyalty program faces is the generic nature of one-size-fits-all promotions that have become ubiquitous. Research has shown that consumers are seeking to be engaged, but only in ways that are relevant to them on a personal level. A customer’s interests and preferences need to be considered when determining the right offer to present to the right customer at the right time and in the right way.
The other hurdle facing merchants today is the “friction” of getting consumers to “self-identify” by completing an app or other form of loyalty program enrollment. Consumers who want to join need to provide a range of personal data, often enter payment information, and then remember to use it whenever they come to the merchant’s locations.
While a handful of consumers are willing to give up that information in exchange for the benefits of a loyalty membership, a vast majority are not—67% of customers never sign up for loyalty programs at all. Among the comparatively small percentage that do opt in, 95% go inactive within 90 days. Within a year, 54% of the remaining app-based loyalty memberships go inactive. As a result, very few customers end up reaping the benefits.
With privacy concerns on the rise and consumer behavior still impacted by COVID-19, the majority of consumers are less likely than ever take the extra time to engage through a loyalty program. This is compounded by the fact that even those who have enrolled will often fail to identify if the purchase is just a small one, say a candy bar in a C-Store or “just a soda” at a QSR. For many chains, it is not uncommon to have less than 5% of their customers self-identifying at the POS by engaging through a loyalty program or app.
But what about “everyone else”?
Ecommerce merchants like Amazon can use shopping data to target the right promotions to the right consumer at the right time. What if multi-unit brick & mortar retail and restaurant chains could do the same thing? And what if they could do this without the need for consumers to opt-in or provide any personal info whatsoever?
Now they can.
A new form of targeted engagement for every customer
With LedgerPay, restaurants and merchants can privately and securely tie each and every purchase (down to a SKU level) to every credit card that is swiped at the POS or entered online.
LedgerPay’s Payments Intelligence® gives merchants a way to track, view, and segment a cardholders’ entire purchase history without needing them to opt-in and without compromising their privacy.
The result: Merchants can now offer personalized promotions that are relevant to each individual cardholder based on that card’s purchase and product preference history.
The solution securely and anonymously captures every detail of every customer transaction, giving merchants access to valuable first-party basket-level purchasing data that was once reserved to the realm of e-commerce. This enables brick & mortar merchants to predict, influence, and reward individual consumer behavior through compelling personalized offers without the need to opt-in. By adding Payments Intelligence®, large merchants now have a way to communicate in a personalized way with all the consumers that are not engaging through their loyalty program.
Individualized promotions can be created and delivered to customers while they are still in the store or at the pump, guaranteeing a higher level of engagement than generic post-shopping promotions. This makes it possible for restaurants and convenience stores to compete with e-commerce merchants, which have long benefited from better access to data insights that allows them to personalize and improve the next shopping experience.
Best of all, merchants can opt to incorporate Payments Intelligence® into existing payment processors or loyalty programs or use it as a standalone technology to engage consumers.
To learn more about how LedgerPay’s Payments Intelligence solution helps bridge the gap between engagement and loyalty, please fill out the form below.