3 Generations of Loyalty & Rewards Technology

generations-of-loyalty-and-rewards-softwareCustomer retention is a vital part of the health of small businesses. Retention is ultimately achieved by creating personalized customer experiences. With a digital loyalty program, merchants have the opportunity to capture customer data and deliver personalized marketing messages aimed at increasing ticket value, preventing churn, and improving the customer experience. Over the years, loyalty technology has evolved, and each generation has provided brick and mortar businesses with better digital and mobile marketing capabilities.

Generation 1: Email Marketing

The first generation of loyalty and rewards technology launched about 11 years ago. These pioneers of the digital loyalty industry evolved the infamous paper punch card into a plastic card that could be scanned at the register. These tablet based systems rest on the store owner’s counter and gives customers points for entering the store. Customers earn punches no matter what they purchase which allows 2 dollar customer to earn the same as a 20 dollar customer. These devices also give customers the opportunity to sign up with their email address, allowing the business to market to them via email.

Generation 2: Mobile Marketing

The second generation came onto the scene about 7 years ago. Similarly to the first generation, these are tablet based systems, but with the added capability of capturing mobile phone numbers. By collecting mobile numbers, cards became optional. This made the checkout process easier and simpler, as customers are identified by simply providing their mobile number. A further evolution was the ability to manually enter points per dollar so businesses could equally award customers based on spend and not simply showing up. With access to mobile numbers, merchants were able to enter the world of SMS marketing. This form of marketing has proven to be tremendously more effective in means of both a higher open rate and a higher redemption rate. Statistically, businesses will find customers redeem 6-8 times more often from mobile marketing over email marketing.

Generation 3: Personalized Marketing

Third generation loyalty programs are those that integrate with the point of sale, allowing the business to track specific customer purchases, down to the SKU. However, with a seemingly limitless number of POS systems on the market, rewards and loyalty technology has struggled to develop solutions that tap into POS transaction data in an efficient way. However, with AppCard’s patented technology, merchants are able to track SKU-level transaction data with no integration required. The technology works with any and all POS systems. Finally, merchants can gain a consolidated view of their transaction data alongside customer information across multiple locations, regardless of the POS system they’re using.

This level of customer insight enables merchants to automate points and rewards based off purchases and amount spent, and they can start to learn customer buying behaviors and market to them individually based on their own spending habits. AppCard uses machine learning tools; which allows for a much more targeted, and automated marketing process. Appropriately named the “AppCard Brain”, the sophisticated platform can start to make intelligent predictions and recommendations on customer purchasing activities.

Due to the fact that it would require a very expensive upgrade to their POS system, this type of technology previously only existed for big box retailers and costs tens of thousands of dollars. But now small businesses of all different sizes are able to compete with this state of the art marketing engine at an affordable price. With this game changing formula for B2C marketing, the landscape for how businesses can effectively communicate with their customers is forever changed.


One thought on “3 Generations of Loyalty & Rewards Technology

  1. Pingback: 4 Keys to Launching a Successful Loyalty & Rewards Program | AppCard Blog

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