Customers Crave Customized Loyalty Experiences

Tokenization captures customer data securely—even people who aren’t signed up for your loyalty program.

June 02, 2022

Person Uses Smartphone

This article is brought to you by ACI Worldwide. ACI-Vertical-@2x.jpg

ALEXANDRIA, Va.—Your customers not only want an omnichannel experience at your convenience store—they expect it. But some convenience retailers’ older payments systems are holding them back from harvesting meaningful customer data so they can drive loyalty. Enter tokenization.

“What we do is we provide merchants an omni-token—a single merchant token that works across all payment channels and can be associated with multiple things,” said Dan Coates, evangelist for ACI Worldwide, which provides mission-critical, real-time payments software. “It becomes the primary key in the payments data and can become the foreign key in others, thus creating a relationship with other datasets.”

Merchant omni-tokens enable retailers to execute business processes that previously required storing sensitive customer data. The process exchanges the primary account number with a token and stores the reference in a secure token vault. Then, if a merchant needs to call out to a loyalty system to obtain the customer’s loyalty status or points balance, the token can be used. This alleviates the need for the customer to enter a loyalty or phone number during a transaction, enhancing the checkout experience.

“The fundamental aspect of tokenization is security, as retailers can learn customer information without leaking PCI data,” said Coates. “Beyond security, retailers have taken it and done some fascinating things.”

Coates explained that a c-store petroleum merchant uses tokenization to reach non-loyalty-member customers. Because of tokenization, the merchant can aggregate the data from these customers and create a group for this customer base.

The retailer can now analyze the behavior of this group and find ways to make its loyalty program more appealing. Or the merchant can decide that these people will never become loyalty members but still market to them.

“Tokenization can help retailers easily implement more frictionless journeys, keep up with changes and more importantly have a more holistic view of the customer in order to serve them better,” said Coates, adding that tokenization is a way to avoid “loyalty leakage.”

Loyalty leakage happens when a customer is a loyalty member but forgets to attribute his or her purchase to a loyalty account via a phone number, mobile app or loyalty card. Tokenization solves for this by associating the customer’s token at payment with his or her loyalty account, stopping the leakage.

“Retailers are able to honor all their customers when they accumulate the rewards they earned, and they also now have an accurate profile of what they’re purchasing,” said Coates.

Tokenization is hardware agnostic. It can work across multiple platforms, point-of-sale systems and mobile apps and is linked to customers and their journeys.

“They help make the loyalty journey a frictionless journey,” said Coates.

This is the second installment of a two-part NACS Daily series on using tokenization to create frictionless payments systems and drive customer loyalty. Read a primer on tokens on the ACI blog and learn more about ACI Worldwide tokenization.