Loyalty Program in Singapore: Card-Based Rewards or Digital Membership?

Loyalty systems not only encourage customers to come back to retailers’ stores but also provide valuable information about customer buying habits. From a report of the Center for Retail Management of Northwestern University, although only 12% to 15% of customers are loyal to a single retailer, this minority generates 55% to 70% of company sales. Additionally, according to Nielsen’s Global Loyalty Sentiment Survey, over 70% loyalty-program participants agree that loyalty programs make them more likely to continue business, and two-third (67%) agree that they shop more frequently and spend more at retailers with loyalty programs. Once customers realize the benefits of a loyalty system, they will actively seek out opportunities to use it. Therefore, loyalty system is an important tool for business development.

The Process of Building a Loyalty Program


1. Build a Solid Loyalty-Strategy Plan

All elements of the program should be prepared and structured clearly in this step, including timing, branding, value-proposition, attractive incentives and rewards, loyalty currency and marketing channels. Companies also need to build a calendar of events and timetable to effectively manage the plan. In case of using outsourcing card-based reward, the companies need to talk to your card vendors and suppliers to align the plan.

2. Embrace a Loyalty Mindset

Once the plan is in place, there is a need of philosophical change in the company views of loyalty for your employees, vendors and customers.

3. Set up ​Customer Relationship Management

At this stage, companies need to ensure that a management system is in place to effectively run the loyalty program. In fact, there are many tasks to consider, including the process of enrolling, identifying and tracking your loyalty customers. Therefore, the enterprises might want to utilize flexible software in order to efficiently set up promotions, run reports and add or delete program options at their preference.

4. Market and Launch Loyalty Program

After putting the pieces together, it is time to promote and launch the program. With the rise of popularity of mobile devices, companies now have to choose between a traditional card-based loyalty and using a digital membership to implement their loyalty strategy plan.

What are Loyalty Cards?

Loyalty cards come in many different types, such as stamp cards, which is the simplest form. Besides, the most popular version resembles a plastic credit card or a key chain fogs containing a bar-code or magnetic stripe that can be scanned at the point of sale (POS). When a card is scanned, the information about customer’s purchases is captured into a database that tracks what has been bought and what rewards the customer has received. The information in the database is used to help the companies understand and influence their customers’ buying habits. Based on the process of building a loyalty program, in order to issue loyalty cards, the small enterprises in Singapore usually need two kinds of collaboration. The first collaborator are loyalty card vendors who print and issue loyalty cards such as Vistaprint and GoGoPrint . The second partner is CRM software suppliers who help the enterprises manage information from customer loyalty card transactions, create advertising and marketing campaigns directly targeted to the audience such as Ascentis and Edenred. These kinds of collaboration in running a loyalty card program not only consume a lot of time in implementing and managing the plan, but also cause difficulties if the enterprises want to make changes of their executive plan. In addition, from customers’ point of view, nowadays, with so many businesses offering loyalty cards, cards can easily get lost in shuffle.

What is Digital Membership?

Businesses directly digitize the loyalty cards into mobile apps or mobile wallets, which will help customers and the businesses immediately keep track on their rewards and customers’ data respectively. Digital membership makes loyalty program execution become seamless and more convenient to both sides, because the enterprises only need one partner or one system for the whole loyalty program, and the customers also get rid of burdens of carrying or losing membership cards

Which Loyalty Option is Better — Loyalty Card or Digital Membership?

From Global Retail Loyalty Sentiment Report in 2016, digital tools are particularly appealing in Asia-Pacific with high percentage loyalty-program participants who feel attractive with stores using loyalty mobile apps (69%), having digital payment systems (78%) or using third-party apps that consolidate loyalty-program information (63%). Furthermore, mobile features are highly desireable by 69% of loyalty-program membership. In fact, they are more likely to use a loyalty program if it is on their smartphone. Therefore, having a loyalty program within their own app or in a separate app enclosed with store digital coupons could help enterprises reach out more green consumers, especially young consumers.

Neilsen also points out that flexibility and personalization are the most two important features that appeal both millennials and boomers in a loyalty program in the future. In fact, with a digital membership program, customers could earn rewards regardless of whether a purchase is made in store, on a website or on a mobile device without any manual input or adjustment. With the help of Artificial Intelligence and Data Analytics technologies, digital membership softwares could also help enterprises automatically personalize promotions based on past purchases and offer customers opportunities to earn bonuses by doing some specific activities. On that account, digital membership potentially becomes the future of customer loyalty strategy.

For these analyses, Loyalty Program is a crucial element for maintenance and development of all business. It appears digital membership with supportive smartphone apps are the most convenient and beneficial choice of loyalty program for companies looking to implement their own system, particularly, if thier customers are young and digitally-savvy people.


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