Omar Ebeid is the founder and CEO of Egypt-based Zeal App, an online payment and loyalty platform

There is a decline in loyalty cards usage and it has nothing to do with loyalty programmes and more to do with today’s customer expectations.

At one point of time, we have all carried loyalty cards. We have misplaced them in different pairs of jeans, forgot to put them back in our wallets, or simply just lost them. We have also refused to use them out of fear harming our social status and these days we are becoming far less tolerant of fragmented processes in-store and online.

In an era where mobile phone payments have gone from a cool experience to now being adopted by smart watches, customers are less likely to look for a loyalty card in their wallets.

Mobile payments and integrated loyalty programmes

In a post Covid-19 economy, where governments are pushing for digital payments and financial inclusion, it is inevitable that loyalty programmes will turn digital too. In principle, payment transactions should always be complemented with a loyalty programme. It’s a win-win; merchants retain their customers and customers win rewards. As customers turn to contactless payments, it is now the safest option to embed loyalty programmes in contactless payments, ensuring that cashiers and customers are safe from exchanging contaminated cards and spreading the virus.

As we move into a more digital-savvy society, customers don’t just expect to be acknowledged by their favourite brands, they also expect to be seamlessly engaged and rewarded, without having to take any extra steps. In fact, 55 per cent of consumers stay loyal to their favourite brands because of the ease of the purchasing experience, while 54 per cent stay loyal for competitive pricing according to KPMG. Although there is a fractional difference, this study indicates the importance of offering a seamless purchasing experience.

The same study by KPMG showed that 86 per cent of consumers loyal to a brand recommend that brand to friends and family, 66 per cent are likely to write a positive review and 46 per cent will remain loyal after a bad customer experience. As you would guess, I’d expect the latter to drop dramatically if the customer wasn’t loyal. So how are merchants expected to keep customers loyal in a post Covid-19 era?

Transactional data analytics to retain customers

Developing a reward structure is tough. Creating incentives good enough to impact consumer behaviour without being too generous to exhaust margins is even harder. Add to that the complications of consumer psychology where case studies have shown that two rewards of equal value may yield different consumer behaviour outcomes and you’ll be lost for good.

Good thing is you still need it. Loyalty programmes make it harder for your customers to switch to another brand, or as we call it in marketing: increase their barriers to exit. Having this effect on your customers is what enables you to retain them even after a bad experience.

Having started Zeal Rewards out of constantly losing my loyalty cards and validating the idea of integrated payment & loyalty with thousands of customers, I am sure that this is the future of loyalty programmes. Customers should not be expected to go out of their way to be appreciated. At the same time, merchants have every right to collect their customers' data ethically and use it to improve their customers' experience.

At Zeal Rewards, we’ve built a data analytics dashboard with built-in marketing campaigns based on a customer’s transactional data. So that means, every time a customer makes a payment using Zeal, they automatically get their loyalty points and we link the transactional data with the customer. This way, merchants can start identifying customer purchasing habits, how many times they visit a store, and if they haven’t visited in a while, merchants can send them a free reward to win them back.

Payment and loyalty

For a merchant to get access to their customers’ transactional data, their point of sale (POS) software and customer loyalty programme have to be integrated. The reason for this is simple: your POS software is what registers a transaction, including all the transaction’s data. However, it does not automatically identify the customer making the payment. This is where your customer loyalty programme comes into play. Because your customer uploads their data onto the loyalty programme to sign up, when you scan your customer’s QR code, it will automatically be linked to the transaction if integrated.

Using mobile loyalty programmes come with more advantages than paper/plastic loyalty cards. To start with, you’ll be able to prompt your customers to make additional purchases based on their previous transactions. You can even integrate artificial intelligence (AI) and machine learning (ML) to forecast your customer’s behaviour or to segment your customers based on the number of transactions, amount spent at your store, and how many loyalty points each of your customers have. After segmenting them, you can reach out to your filtered customers via push notifications and SMS.

It’s time you ride the wave

If you run a shop of any kind, you’ll need a loyalty program. Make use of the new emerging technology in digital payments and loyalty and sign up to a loyalty program that works best for you. Find something that can boost your customers’ experience, that can integrate with your POS software, and preferably offers payment and loyalty within the same transaction. You might want to start by checking if Zeal Rewards operates in your market. If we do, we would be more than happy to work with you. Reach out to us at hello@zeal-app.com and write “Wamda Article Referral” in the subject header. We’ll have you jump the queue and let you try Zeal out for yourself for free!