It is often true for any business that it is cheaper to retain existing customers than to try and attract new ones. Some of the best methods for encouraging customer loyalty is to offer consumers incentives to make repeat purchases or sign up for subscriptions. Using a loyalty and rewards program to drive sales, gather customer data, and improve customer retention is a tried-and-true strategy.
As life gets more and more hectic, and many shoppers do the bulk of their purchasing online, customers are looking for flexible incentives and rewards, with 45% stating that digital pre-paid points cards were their preferred options when signing up for a rewards scheme.
We are all fairly familiar with the standard rewards or points card, the most notable being provided by Superdrug, Waterstones, or most major supermarkets. You earn a certain number of points with every purchase you make with the retailer and when you have collected a certain number of points, you can use it to discount your next round of shopping with them or use them to redeem limited edition products. These rewards programs typically work on a closed-loop basis where you collect the points from the retailer, but you can only use or spend them with that same retailer. It means a lot of consumers end up with multiple rewards cards in their purses or wallets and then become frustrated with the different ways each rewards scheme works.
A digital prepaid card works on an open-loop system, where the customer collects the points from wherever they have made a purchase but can then spend the points with another retailer that accepts the same card, the points acting as currency between the different businesses. A good example of a successful open-loop rewards program is the one established by Prosper2 Business Club. Their partnership with Mastercard allows their customers to redeem their points to spend with any business that accepts Mastercard for payment, giving their customers total flexibility as to where they can spend and enjoy their points.
Customers are constantly on the hunt for better deals that makes their money go further and suits their lifestyle. With more and more people focused on decluttering and streamlining their lives, carrying multiple rewards cards and filling their mobile phones with various apps with all of the different retailers they use is becoming inconvenient. The digital prepaid, open-loop card seems to be the way of the future for business loyalty and rewards programs.