Loyalty Programs in the Age of Digital Transformation

There is no doubt that the world has changed drastically in the last decade. There has never been so much access to information as there is today. These circumstances push companies, and their loyalty programs, to adapt to the current situation. Digital transformation is essential to incorporate into your strategy in order to stay competitive. 

Digital transformation is about integrating digital technology, such as computer software, algorithms, and data models into daily business operations. The same rules apply to the loyalty program, where it is possible to implement several progressive computer-based solutions. From the operational point of view, digital transformation is a revolution rather than slow-changing evolution. 

To explain this with an example, let’s take a look at old-fashioned, manual loyalty programs, for example, one based on stamps. We can compare this to cars produced at the beginning of the automotive industry. The vehicles worked properly, but they had have several disadvantages: they were slow, not so comfortable, and required many repairs. Using this metaphor, we can compare digital loyalty programs to present-day cars. Most of the activities are carried out by the vehicle on its own. Except for refueling, cars move smoothly, quickly, and safely. Finally, cars provide information on miles/kilometers traveled, fuel consumption, and other important pieces of information. The same can be said of digital loyalty programs. The bulk of the operations are done automatically and require minimal adjustment. And these programs provide comprehensive statistics about customers and their behaviors. The most technologically advanced programs can even predict trends and provide recommendations using AI algorithms and Machine Learning.

Implementing digital technologies into loyalty has endless advantages, including:

• Automation of the program operation processes, such as enrollment, accrual, and redemption
• Creating additional touchpoints to maintain a relationship with the customers, like e-mails, SMS, social media
• Ability to quickly respond to customers’ needs
• Easily connect loyalty program to other systems and existing mobile applications
• Comprehensive insights into customers’ habits and behaviors
• Advanced analytics
• Holistic, 360 degrees view on a particular customer

And this is not even close to the complete list of features that digital-driven loyalty programs can offer.

What types of companies can perform loyalty program digital transformation?

A digital transformation is a modern approach relevant for every type of company, whether it be a small business or a large enterprise. The only significant difference will be in the software that companies will use. For example, large corporations should invest in tailor-made, advanced systems, while smaller companies will likely want to use less intensive, cloud-driven software.

As you can see, digital transformation in loyalty is crucial to running a modern, successful loyalty program. It allows for implementation improvements in many areas of loyalty program operation. The goal is to use digital technology effectively. Switching to digitalization allows for the implementation of contemporary solutions such as Machine Learning, Artificial Intelligence, Omnichannel Marketing, and Marketing Automation. The decision on the time and scopr of the transformation is up to you.

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