Loyalty Blogs

Rewiring Loyalty: Can AI Repair Loyalty Programs?

  • Posted on March 28, 2024 by Robert
  • Reading time about 5 minutes
AI Loyalty Programs

A product moved from the cart to checkout, a successful payment, and voila! Rewards points were instantly credited to the customer’s account based on their purchase value. It has become seamless to include customers in your loyalty ecosystem. However, amid this ease lies a concerning challenge—engaging customers meaningfully for the long haul.

Businesses are spending good money on loyalty programs to enhance customer satisfaction and retain them. With the advent of online customer acquisition channels like Google Ads, customer acquisition is easy but taxing at so many levels. A study shows that customers, on average, enroll in 16 loyalty programs but actively participate in only 3. That says a lot about engagement success.

Mr. Deepak Tomar, CEO and founder of Novus Loyalty, an AI-powered loyalty management platform, emphasizes the need for hyper-personalization and instant gratification to bridge the gap. Leaders are counting on personalization big time because it can give wings to their revenues. A study from Deloitte Digital shows how personalization has resulted in 1.5x greater revenue per customer compared to brands with low personalization maturity. What’s the secret behind their remarkable growth?

Artificial intelligence, blockchain, and phygital convergence—opportunities are multiplying with these tech heroes in the loyalty space. No wonder, personalization leaders are increasing their budgets four times faster. This is not overconfidence but a data-backed strategy. Here’s an interesting scoop for you:

The study shows that 69% of customers prefer purchasing from brands that prioritize personalization. However, most brands are far from delivering the expected level of personalization. A staggering 50% of the customers feel that personalization feels off-target and fails to meet their requirements. There are gaps to be filled.

Mr. Tomar sees artificial intelligence as a game changer because it can enhance the user experience tenfold and soothe their journeys at various touchpoints. Data is the gold mine of insights waiting to be extracted. It can help brands understand their customers and offer hyper-personalized experiences. But, is the road that easy for the brands?

Harnessing the power of AI

Harnessing the power of AI isn’t as easy as it sounds. Customer data is cluttered. It needs to be cleaned and standardized. As a leading loyalty solution provider, Novus has observed and resolved challenges around data analytics and cloud integration. It’s not always possible to know what goes inside customers’ minds. But one must leverage AI and ML to find patterns around buying preferences, behaviors, and expectations to craft hyper-personalized loyalty programs. At Novus Loyalty, we are translating hyper-personalized loyalty programs and instant gratification through cutting-edge technology. Our instant gratification rewards software leverages AI and ML to analyze customer data and engage customers right at the interaction.

Transactional loyalty has worked for brands for a long time, but not anymore. This alone cannot engage customers in a highly cluttered market. Rewarding customers for the value they spend is far from personalization. There are other touchpoints, too, where customer engagement can prove pivotal. To collect valuable customer data and encourage participation, rewards can be offered for recording feedback through surveys, completing quests, posting or sharing on social media, referring friends, and much more.

Engaging customers at different touchpoints reduces the prospects of customer attrition as it offers much more than transactional value. Gamification is another element that binds customers to a brand and boosts engagement. It’s all about establishing meaningful relationships with the customers. It helps in:

· Reducing customer acquisition costs

· Increasing average purchase value

· Boosting lifetime value

· Fostering brand advocacy

Customers aren’t finding ways to avoid loyalty benefits. If your loyalty programs aren’t working, there must be some gaps that need to be addressed. Loyalty programs must align with what your customers want, not with what is working for others in the market. As a business trying to solve the loyalty mystery, you can ask yourself some basic questions to find where your loyalty programs are broken.

Are customers engaging with our loyalty program as expected, or is there a lack of participation?

Are we seeing a high rate of customer attrition despite the existence of our loyalty program?

Are customers redeeming their rewards, or is there an accumulation of unused points?

How are competitors’ loyalty programs performing in terms of customer retention and engagement?

Are we effectively leveraging customer data to personalize loyalty rewards and experiences?

Are there technical glitches or operational inefficiencies hindering the seamless functioning of our loyalty program?

Are we regularly collecting feedback from customers regarding their experiences with our loyalty program, and if so, what are the common pain points or areas for improvement highlighted in this feedback?

Investing in an advanced loyalty management platform can take half the hard work away from repairing the weak points in your loyalty programs. As tech experts and loyalty specialists, we help businesses from diverse industries every day to streamline their loyalty management with personalized loyalty programs. Novus is an enterprise-ready platform that can scale your loyalty operations and integrate seamlessly with your other tools. From offering a highly functional reward marketplace to effective gift card management, it does all with no scope for disengagement. Book a demo to learn how it can revolutionize your loyalty ecosystem.

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