May 11, 2020

4 ways loyalty programs can drive digital engagement

These days, if retailers aren’t leveraging loyalty programs to connect with their hard-won customers, they’re missing out on opportunities to boost much-needed sales. Loyalty programs are one of the best ways to drive brand affinity and repeat sales, but now more than ever, retailers must examine how their programs can meet consumers where they are — even if that means not actually inside a brick-and-mortar store.

As shoppers gravitate online and leverage digital touchpoints to connect in new ways with retailers, such as grocers, delivery services, convenience stores or specialty retailers, what may have been an effective loyalty strategy in the past is no longer status quo. Now is the time for smart retailers to adjust their loyalty strategies so their programs are more versatile and appeal to shoppers that are increasingly using mobile and online shopping.

Here are four research-backed tips to help fine-tune your loyalty program to drive engagement in this increasingly digital world:

1.    Provide mobile-enabled and digital reward options. Engaging loyalty programs offer the right rewards and meet members where they are. With mobile device and mobile wallet usage trending upward, it makes sense that mobile-friendly, digital rewards will resonate with mobile-minded audiences. Blackhawk Network research  found 86% of surveyed consumers want the option to add rewards to a digital wallet. One of the most effective digital reward options is gift cards; according to separate Blackhawk research, 63% of respondents feel that gift card rewards increase their loyalty to a brand or retailer and make them feel valued. Gift cards are incredibly versatile in that most can be bought, given and redeemed online — in addition to being mobile wallet-compatible. 

2.    Use points as incentives to drive desired behaviors. According to recent research, nearly half of shoppers surveyed would be more likely to join a loyalty program if they could use their points to pay for things. A separate study  found that 66% of respondents wanted to pay with points in the next six months if given the option — but many programs don’t offer this. Enabling shoppers to redeem points to drive purchases is just one way to drive desired behaviors. Offering points can also help encourage other behaviors such as mobile app downloads, sign-ups for email offers, in-store visits and referrals.

3.    Offer more frequent redemption opportunities. Frequent redemption options can help keep shoppers engaged regularly. According to research, loyalty program members — particularly younger generations surveyed — want more accessible redemption opportunities, prefer to redeem their points at least once a year and want to redeem well before they hit the $100 mark in reward earnings. Accessible redemption opportunities are a must. With roughly nine out of 10 surveyed loyalty members claiming to redeem points at least once a year, enabling frequent mobile and digital redemption opportunities can likely help keep this audience engaged regularly.  

4.    Engage cash customers, digitally. A 2019 report by the Federal Reserve System  found that nearly one-quarter of Americans are unbanked or underbanked — and these customers are finding that taking part in the digital marketplace is nearly impossible. Research  supports the idea that shoppers (including the underbanked and unbanked) are very interested in connecting cash and digital payment methods; seven in 10 shoppers surveyed said they are interested in adding cash to an app or digital wallet while in-store. Incorporating loyalty programs into the mix is a triple threat — especially for cash customers who want to access loyalty programs digitally. Creating a more cohesive omnichannel experience by enabling customers to upload physical loyalty cards online, via an app or even into mobile wallet can open doors for cash customers that are currently closed. Think about it; instead of having to go in-store to redeem their points, they’re now empowered to use their smartphone or hop online. Engaging this audience can help brands acquire an untapped customer segment with a significant amount of buying power.

Research has found that the average consumer belongs to six loyalty programs but is only active in four5. Retailers are missing out on the opportunity to fully engage loyalty program members and by leveraging technology to encourage digital touch points with your brand, you can cultivate long-lasting relationships that pay long-term dividends.

By Brett Narlinger, head of global commerce at Blackhawk Network.
Article originally appeared in