Goodbye Loyalty Cards!

I travel a lot.

Over the years, work has taken me to different countries across different continents. Although I explore brands that are unique to a particular location, I do seek comfort in the familiarity that the big high street stores bring to me. Because it did not matter if I was in London or Helsinki or Dubai or Wellington, I would find the same brands across the malls.

Unfortunately, though, these brands do not have the same familiarity with me.

The loyalty program in one country is not recognized in another in many cases. So although I have spent, and continue to spend, a small fortune on these brands, I remain unvalued as a customer. So I do not use my loyalty programs a whole lot.

But it's not just me, I find that not too many people are ‘active’ loyal members. Although research shows that there has been a 31% increase in the Loyalty Program enrolment in the past four years, there aren’t many brands that have successfully established strong advocacy of the programs. In fact, only 22% of members perceive their experience with the brand as better than that of non-member customers.

Source: Bond Brand Loyalty and Visa

Let’s put this to perspective - 57% of members in a loyalty program don’t know their points balance and 38% are unaware of their points value. An estimated $100 billion in points are left unredeemed by members. Inactive memberships can be costly and businesses risk losing customers.

To understand the reasoning behind this, we need to understand customer needs and expectations.

Enough data has been shared to highlight the fact that experience takes the utmost precedence over all the aspects for today’s customers. Unsurprisingly, experience overtakes discounts as well, making the ‘points/ discounts for transactions’ model irrelevant. And, brands can forget one-size-fits-all marketing techniques as customers today need to feel like they are being treated uniquely.

The resulting complex ecosystem can be tough for businesses to navigate and ensure that the millions spent on building loyalty programs get sufficient ROI. To achieve that, businesses need to shift gears from what they think customers need to what the customers actually need.

To begin with, businesses need to understand how context impacts intent. And that’s where AI comes in. By accessing a number of data points that span behavior, frequency, transaction value, location, channel, and others, AI can identify what drives customers individually.

Businesses can create highly differentiated loyalty programs that drive meaningful engagement. Brands can create personalized offers, perks, benefits, and services, translating into a positive experience for customers. McKinsey states that a brand’s marketing spends can deliver five to eight times the ROI and lift sales by 10% or more when brands get their personalization right.

Walgreens has successfully revamped its loyalty program through personalization:


In addition to personalization, AI can also enable on-premise businesses to set-up Face recognition based loyalty programs.

Let’s do a quick show of hands - who likes to carry a bunch of membership or loyalty cards in our wallets? Not too many of us. Who likes the idea of having to share our phone numbers with the sales staff at the till to get some (sometimes) insignificant points? I would imagine, none of us. Even though most brands are switching to mobile app-based programs, there is still a bit of friction involved. Facial recognition can provide a frictionless experience for customers.

The best example is by Cali burger, which has implemented a Smile based loyalty program, literally. With on-premise businesses constantly trying to understand customer behavior similar to their online peers, AI opens up plenty of opportunities. John Miller, CEO of Cali Group says, “These face-based technologies — artificial intelligence, machine vision — allow us to see our customers in the offline world like Amazon sees its customers in the online world. And that allows us to create tailored experiences for the customer and also allows us to directly target that customer in new ways when they come back to the restaurants.”

Facial Analytics can help unlock a lot of benefits for businesses as well as customers by enabling frictionless payments, customized offers, dynamic pricing, relevant recommendations and much more. Below are the applications for Facial Analytics in retail:

Looks like exciting times are ahead. Get ready to toss out those loyalty cards and get ready to smile!

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