Evolution of Customer Loyalty Programs at The POS

14 June 2022

Customer loyalty makes a big difference in business. It’s much cheaper to keep existing customers coming back than acquiring new ones. Plus, the most loyal customers spend more. So let’s dive into the Evolution of Customer Loyalty.

According to business strategist Fred Reichheld, author of a book called The Loyalty Effect, a five percent increase in customer loyalty can boost profitability by as much as 100%.

It’s no wonder, then, that customer loyalty programs are a big deal for businesses these days. We can see their impact clearly in the restaurant industry. According to Upserve, more than half of adults (57%) are more likely to dine at a venue that offers a loyalty program.

Loyalty schemes are nothing new. In the 1990s, brands started developing card-based rewards schemes. QSR chains like Subway introduced simple systems where you got a card punched or stamped for each purchase, then when you had totalled up so many, you got a free purchase.

That gradually gave way to electronic cards, which were swiped at point of sale to log a purchase or upload points. These in turn were the gateway to today’s fully digitized schemes run via online accounts and, most recently, mobile apps.

Customer loyalty – digital revolution

Digitized loyalty programs have handed businesses an invaluable resource that is helping to make their customer retention initiatives more effective than ever – data. Having access to a whole heap of data about who your customers are, what, where and when they buy allows businesses to do several things, such as:

  • Identify who your highest value customers are, and target rewards schemes at them to maximise impact;
  • Personalise rewards and offers so they are as relevant as possible to the customer, which will boost uptake;
  • Connect activity across different channels, so in the store or restaurant, online, via your branded app etc, to make it easier for customers to both earn and redeem points.

Streamlining customer loyalty programs to make them as user-friendly as possible – and to make ‘winning’ the rewards as easy as possible – is a key trend. That’s one reason why we’re seeing card-based schemes being phased out. A lost loyalty card might mean you lose all the points you’ve earned to date; a customer who has forgotten to bring their card with them one time misses out.

So, the next generation of loyalty programs are evolving to simplify the way customers can earn and redeem their points. App-based schemes are increasingly popular on the back of the fact that 84% of UK adults now own a smartphone. Branded apps also allow businesses to tie in a bunch of other services and benefits. E.g. online ordering and seamless location-based delivery.

But other schemes are using other means to log and administer loyalty programs – bankcards, email, phone numbers etc. This makes participation in loyalty schemes even more seamless. All you have to do is provide your name or number, or it is all done automatically when you swipe your card.

Loyalty and POS

Point of Sale (POS) systems have an important role to play in running such schemes. Whatever type of POS system you have – staff operated fixed or mobile terminals, self-service kiosks – they form the key point in collecting the necessary information required to log points and activate redemptions.

It isn’t just a case of one of your staff or the customer themselves inputting their name or number, or the system automatically logging a point-earning transaction from the payment details. Your POS system can, for example, also differentiate between purchases and allocate different points as required. The POS provides a key source of purchasing information so you can identify your most loyal customers. POS systems can also tap directly into your CRM to personalise offers and rewards in real time, and flag to staff and customers alike when they are due a reward.

In other words, the modern POS plays a pivotal role as a hub for administering modern digitized loyalty programs – gathering and processing data, automating management, and making the whole process simpler for customers and staff alike. Simple, streamlined loyalty schemes with relevant, personalised rewards will boost uptake, which due to the impact customer retention has on profitability, will also boost your bottom line.

Loyalty schemes can be managed through your EPOS system. Taking peoples details at the point of sales, signing them up to a points program, free or paid for has never been easier. AURES offer a wide selection of EPOS systems which can be used alongside one of our many software partners to offer you the full loyalty program packages you require for your business. Click to view all our all-in-one EPOS here, our mobile POS here and our self-service kiosks here. Alternatively, you can contact the sales team to discuss your options by emailing: salesUK@aures.com or calling: 01928 599 966