Imagine a nearby plaza or town centre that you frequent for restaurant, supermarket, spa & salon and other necessary or recreational activities. Invariably most of these businesses will have exciting offers or deals to entice you. However if you avail their offers you will only be able to buy specific products or services attached to the offer. Instead wouldn’t you love to have the freedom to buy anything you want but at an affordable price? Yes, off course and the way to make it happen is through a networked customer loyalty program.
A networked loyalty program consists of multiple stores across different industry verticals participating in a common loyalty program. Members of the loyalty program, in other words customers, can earn and redeem reward points at any of these networked stores.
Studies have shown that the benefit or power of a loyalty program can increase fivefold with store-to-store networking and there are three strong reasons for it:
A networked loyalty program captivates the customer and creates stickiness effect:
When a customer realizes that he/she can earn points on every bill and redeem those points at a later point of time in the same store or at any other store in the network, he/she is more likely to get hooked on to the program resulting in increased patronage.
Customers can use cash reward to purchase items of their choice:
When a customer has cashback points available to redeem, he/she is more likely to purchase an item that he/she always wanted to buy but could not because of the high price. This increases the spread of items purchased which is what the merchant wants.
Merchants get repeat footfalls, bigger orders and can maintain higher margins:
Loyalty points encourage customers to look beyond offers and discounts. Hence they end up spending more resulting in higher margins and profitability for the business.
Hitherto it was assumed to be very difficult to convince different merchants to work together on a single networked loyalty program. However a carefully planned networked loyalty program like r-Rewards that establishes a cap on out-of-store redemption can not only be effective but also very profitable for all participating merchants in the long run. So it is a win-win for both customers and merchants.