Is personalization the key to customer loyalty?
When it comes to customer loyalty, businesses try to ensure their customers’ happiness, and have them come back again. However, according to new data released by Adyen, businesses are still missing the mark in meeting consumers’ expectations and retaining customer loyalty in a price-sensitive and highly competitive environment.
Adyen’s Singapore Retail Report 2022 surveyed 1,000 consumers and 500 businesses across different sectors in Singapore, including retail, hospitality, and F&B. According to the findings, Singaporeans are more likely to frequent businesses that reward them for their loyalty with the caveat that loyalty programs must be hassle-free to use. Yet, many businesses in Singapore don’t prioritize loyalty initiatives as they rarely contribute to revenue.
With the peak season approaching, businesses need to ensure they have a customer loyalty program that can benefit both them and their customers, which is achieved by engaging customers and unlocking insights into their behaviors and preferences.
The value of a well-designed loyalty initiative shines especially bright in the quick-service restaurant industry, where customers are less likely to be stringent about collecting their loyalty points.
- In the US, Dunkin’ Donuts simplified the process by recognizing the individual customer based on the credit card they used for past purchases – made possible by tokenization technology.
- Thanks to the connection between the payment card and the loyalty program, customers get rewarded with points without additional effort on their end.
In an era characterized by discount pricing, a business’s loyalty initiative can be a competitive advantage. By understanding the customers’ consumption patterns, businesses can achieve a richer engagement with them – and it can all start by partnering with the right payment provider.
For example, in the retail industry, 62% of customers in Singapore say loyalty programs rarely offer rewards that matter while 66% would shop with a business if their loyalty program worked automatically via their card. 43% of businesses in Singapore themselves stated that don’t have formal loyalty programs in place to reward customer loyalty.
In the travel and hospitality industry, 63% of Singapore would prefer using self-service kiosks for check-ins and check-outs. 59% also want hospitality venues to issue payment tokens so they can make their purchases easily and securely. Interestingly, 48% of hospitality operators find it hard to maintain customer loyalty in the current environment and rely on the quality of their products to attract repeat customers.
Meanwhile, in the food and beverage industry, 52% of Singapore would be more loyal to quick-service restaurants that use technology to make the experience quicker and more convenient. 48% of diners want restaurant staff to recommend dishes they may enjoy based on their past orders. At the same time, 43% of dining operators currently lack the technology infrastructure to personalize the dining experience across channels.
For Priyanka Gargav, Adyen’s head of commercial in SEA and Hong Kong, when businesses plan their customer loyalty program, they need to be careful to ensure that what consumers receive will have benefits for the company. For example, brands that spend a lot on customer loyalty programs that offer cashback might lose any projected earnings if customers switch to a different brand because cashback is no longer available.
As such, while building customer loyalty can improve the business, the reality is, businesses need to ensure they are making the most of the data available to them to have the right offer for the right customer. This is achieved through personalization.
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