Data rules the day in the modern consumer economy as businesses attempt to find more ways to track and engage their customers. For online businesses, tracking is easy. Amazon has a nearly endless stream of consumer data it collects every day. This data is leveraged for personalized email marketing, product recommendations, and even the flow and content of the Amazon website itself.

The Amazon personalization experience is part of a larger trend of online businesses offering data-driven personalization. These tailored experiences are affecting customer expectations as 91% of consumers agree that a personalized experience is valuable to them, while 50% say it’s extremely valuable.

Brick-and-mortar businesses, on the other hand, face a much more difficult reality. Most customers that walk in their doors are neither identified nor tracked. But it’s not for lack of trying.

Unfortunately, the best mode brick-and-mortar stores have to see their customers at the moment is the traditional loyalty program. But, as we’ll see, these loyalty programs are failing to match the standard that online customer tracking has set.

The Current State of Loyalty

The loyalty program is where the rubber meets the road in consumer tracking and engagement for brick-and-mortar businesses. Enrolled customers who actively utilize the loyalty program provide regular behavioral and product preferences data to the business when they scan the loyalty card or give another identifier. The business, in return, can give them personalized offers.

The problem is both enrollment and active loyalty participation remain low, with an average of 56% of customers being enrolled in a program, but only 23% are active enrollees. But depending on price thresholds or time pressures, even active participants may not always scan their loyalty card every time they make a purchase, meaning that the data received on customers can be incomplete or inconsistent.

That means there’s a small slice of your customers giving you pretty good data, a decent chunk giving you little data, and almost half giving you no data at all. When you compare that to the data harvesting machines created by online players, the prospect of personalization seems like a distant hope.

For brick-and-mortar stores to stay competitive in the current market, they have to increase engagement levels to keep up with customer expectations. Otherwise, they’ll start to fall behind on the personalization front.

Loyalty ROI Challenges

Businesses allocate an average of 10% of the company budget to building and sustaining the loyalty program. This figure might seem extremely high for programs that are severely underutilized by customers, but analysis of loyalty effectiveness proves that it’s a worthwhile investment.

Recruiting new customers is 9 to 11 times more expensive than retaining an existing customer. And customers that are retained and engaged tend to become crucial profit producers for businesses as even a 7% increase in loyalty can boost lifetime profits per visitor by 85%. Additionally, a 3% increase in engagement is comparable to a 10% OPEX cost reduction.

So, the savings and profits tend to pile up quickly. And that’s why businesses keep pumping money into their loyalty programs despite dismal participation numbers.

Loyalty Technology Limitations

The weird truth lurking at the bottom of dismal loyalty participation numbers is that customers are willing to play ball for the personalization they want. A whopping 71% said they would share their personal information with a loyalty program to get a more personalized experience.

So the question becomes: Why are loyalty programs failing if customers are willing to play ball? According to executives across many brick-and-mortar industries, customers are leaving loyalty programs because they aren’t seen as valuable, personalized, or relevant.

This inability to offer a personalized experience is largely brought on by technological limitations as nearly 9 in 10 (89%) executives with a loyalty program are concerned with their current technologies. For most multi-unit retailers, their back office has evolved organically over time and the result is an environment of disparate and non-compatible technologies that make it difficult to create a singular lens into customer behavior.

The Power of Payments Intelligence to Seamlessly Track All Customers

 

This is where PayiQ’s Payments Intelligence® solution enters the picture. Our cloud-enabled service was designed around the needs of modern businesses looking to offer personalization. We gather a consistent stream of first-party data, insights, and engagement opportunities that were previously unavailable to brick-and-mortar chains.

This technology enables access to detailed information about every single customer who comes into your store without a single employee having to get loyalty sign-ups. You’ll be able to see all previously anonymous customers with no extra employee effort.

So how do we do it? The easiest way to conceptualize how Payments Intelligence works is to think of your customer’s payment card as their loyalty card. When they swipe in your store, we capture all that rich payment data using our proprietary payment cloud and store it in a secure customer profile—giving you unequaled access to customer transaction data.

That data includes SKU-level purchase history, frequency and time of visits, average ticket size, location visited, and much more. You get this level of insight on every single customer who uses a card to pay in your store. All their data is stored in an anonymous customer profile attached to their payment card and that profile gets richer and deeper with every purchase.

This data is captured automatically in the background by our payment cloud. You don’t have to do a thing.

Payments Intelligence is the First True Omnichannel Loyalty Solution

Probably the most powerful feature of our data-capturing payment cloud is that net new insights can be obtained in all channels. So, if your customers are engaging you on multiple fronts, you’ll be able to capture consistent data no matter where they shop—no stitching required.

You can leverage this data to bolster your business efforts. You can plug your net-new insights into your loyalty program and start pushing out personalized offers to customers who never signed up for a loyalty program.

The power of true omnichannel data is the ability to offer personalization at an unprecedented reach. By utilizing previously inaccessible customer insights, you can see immediate results and revenue—giving your business a huge leg up in the ever-evolving customer marketplace.