The Building Blocks of Loyalty

Retailers that offer merchant-branded debit programs coupled with rewards see a boost in profits—and consumer loyalty.

October 10, 2018

This article is brought to you by support from ZipLine, a NACS member.

PORTLAND, Maine – How can today’s retailers stand out in such a crowded marketplace in order to cultivate loyal consumers? One proven method is combining private-label debit and rewards programs that enable merchants to more effectively engage consumers, triggering loyalty and sales growth.

“ZipLine’s seamless combination of payment and rewards is the ‘secret sauce’ to gaining consumer loyalty,” said Kristen Bailey, chief marketing officer at ZipLine, a leading provider of payment-powered loyalty programs to the retail industry. “Our research demonstrates that a combined payment and rewards strategy encourages higher enrollment, increases consumer participation and generates higher sales than programs that offer payment or rewards alone.”

Branded debit cards and mobile payment programs provide a frictionless loyalty experience to consumers, from the pump to the store. And once guests are in the store, loyalty programs work to cultivate and leverage the relationship between the retailer and consumer.

To succeed, these programs need to promise security at every touchpoint across the user experience. Consumers must feel confident about providing certain information at enrollment. “Once a consumer feels secure enough to sign up for a program, you reach a new and critical level of brand loyalty. They become stickier consumers and brand advocates,” said Bailey. “They are more committed to your brand, with loyal users causing 135% lift in purchases.”

Retailers that offer these programs also benefit from data collected about each consumer. Rewards can be customized and based on this information, which gives brands a way to differentiate themselves from competitors, while creating shopping experiences tailored to the customer’s actual purchase preferences. “With the consumer insights provided by these programs, merchants can tailor consumer’s rewards for a highly gratifying customer experience,” Bailey said.

Private-label debit long has been the lowest-cost payment method available. With a flat, per-transaction fee and no interchange or discount fees, retailers can redirect payment fee savings into funding consumer engagement efforts such as incentives and rewards.

When merchants use the savings from branded payment transactions to fund consumer rewards, they’re building a cycle that pays dividends in more frequent visits and higher spending from these consumers. “By combining payment and rewards, retailers are able to anticipate the needs of their consumers and create an in-store experience that wows them,” Bailey said.

This is the second installment of a two-part series. For Part 1 of this article, see “A Mobile Consumer.”