Purchase based, punch-card, paid and digital - there are a lot of different types of loyalty programs out there, and while they differ in type and effect, they all aim to grow customer loyalty... But is that all a loyalty program is good for?

No!

The purpose of loyalty programs stretches far beyond growing customer loyalty. As much as loyalty programs are loved by the shopping center industry, they're also often under-utilized. By having a clear idea of what other goals you'd like to use your loyalty program for, it is possible to achieve great results.

In this blogpost, we have a look at some of the different use cases for loyalty programs:

Increase footfall and sales

Did you know that, on average, it can cost up to 7x more to get a new customer than to retain an existing one?

New customers are generally more expensive to draw in. This means, the more shopping centers can nurture customer loyalty, the better position they're in, both in terms of footfall and sales. This is where loyalty programs come into the picture. Because, when it comes to growing customer loyalty, nothing is as targeted towards it them.

Now, you might be thinking "We don't need another coupon email list". And, in a sense you're right - the last thing you want is for your shopping mall to become a graveyard for outdated loyalty programs.

Customers today are looking for experiences (preferably digital), and their expectations have significantly increased over the years. They want to feel valued and special. So it's not surprising, if your old loyalty program isn't showing the results you're hoping.

If you want to grow customer loyalty today, it's key to deliver according to modern customer expectations. This means the loyalty program needs to be interactive and add something "extra" as an integrated part of the shopping experience.

In practice

If you want to ensure great footfall and increased sales, a way to go about it can be to center your loyalty program around exclusivity.

This can be done by offering everything from rewards and discounts, to quizzes, competitions and games, exclusively to customers who are loyalty program users.

A real life example of this is Patriot Place, who have centered their app-based loyalty program, the "Advantage App", around the exclusive benefits being a loyalty program user offers.
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Influence customer behavior

Customers are notoriously difficult to influence, and even more so today, as the traditional marketing tactics are loosing their effect.

This is where loyalty programs come into the picture, as they can be used to reward wanted behavior - consider:
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Want to create more footfall = reward customers with points for visiting your mall.

Want space out customer visits = reward customers for visiting outside of rush hour.

Want to create traffic in a certain part of the center = reward your customers for exploring it.
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A loyalty program can serve as the needed nudge to create wanted customer behavioral patters - which can last far longer than the time span of the reward.

Modern consumers don't just want to be told to do something, they want to have a real reason. You can use a loyalty program to shape customer behavior, while nurturing customer loyalty, as your customers will appreciate the benefits you're offering them.

In practice

If you want to influence customer behavior, you need to consider two things:
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1. What you concretely would like your customers to do.
2. What options you have available within your loyalty program to shape customer behavior.
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You need to bridge what you would like your customers to do, with the most effective way that's accessible to encourage that behavior.

Nivy Centrum wanted customers to explore the brand new mall when it opened, and achieved this with a treasure hunt around the mall, by using their loyalty app.

Read more about it here.

Or how Nivy got customers to start using the food hall during dinner with their loyalty program reward, which was available for loyalty program users who made purchases after 5 p.m. in the food hall.

Optimize marketing efforts

Modern marketing is a jungle, and to cut through the noise, you need to be sharper than ever.

E-commerce has mastered this discipline - They know exactly who their customers are and what they like. Shopping centers on the other hand? Not so much.

Customer insights are often limited to areas like visitor count. And that's an issue, because customers are not looking for "one size fits all" marketing. They want to see things that actually bring value for them. This means, that if shopping centers want to stand a chance, they need to do something radical to improve their marketing.

So, what does this have to do with loyalty programs?

Loyalty program can be the key to understanding customers and, in that way, optimize marketing efforts.

You can utilize a loyalty program to get important insights into who your customers are and what they actually like. With these insights, it is possible to improve marketing efforts and start communicating the right things to the right customers, in order to get the biggest payoff for your marketing dollars.

In practice

Depending on the type of loyalty program, you'll have different amounts of data and insights available. It can span from email opening rates to comprehensive data dashboards that contain everything from customer demographics, to post performance and influenced mall visits.

In that sense, how much you're able to optimize your marketing efforts is going to be largely dependent on how data-forward you loyalty program is. By seeing how your customers are responding and interacting with your loyalty program, you can make more informed marketing decisions.

Næstved Storcenter decided a loyalty app was the best way to increase their competitive edge, as it provides them with a great opportunity to understand their customers through data. And, their popular "Reward of the month" concept allows them to closely monitor the performance of each month's rewards, in order to learn exactly what their customers love the most:

You can read the full case study on Næstved Storcenter, here.

It starts and ends with the customer

Now, we've had a look at some of the loyalty program use cases for shopping centers.

Whether you're looking to achieve better footfall or optimize your marketing efforts, with modern consumer behavior, it is important such efforts start and end with the customer. And, loyalty programs can be the key to ensure just that.

Do you want to know more about the benefits of digital loyalty? Book a demo.