Izicap Blog

Making Loyalty Pay for SMB Merchants

For thousands of Small to Medium-sized Business (SMB) merchants across Europe, customer loyalty has become more important than ever for driving their growth and profitability.

In the past, loyalty marketing has come at a price which many smaller businesses cannot afford. But now, thanks to innovative Software as a Service (Saas) technology, acquirers are offering their merchants low-cost, high-return digital marketing services to boost their margins, loyalty and profile.

Why is loyalty so important to SMBs?

‘Acquiring a new customer is five times costlier than retaining an existing customer’ Forrester

For any business, promoting customer loyalty makes sound financial sense. Having a robust and intelligent loyalty marketing program in place enables them to build high-value relationships with their most faithful customers. They benefit from reduced cost of sale, easy cross-sell and upsell opportunities, predictable repeat purchases and the ability to target relevant offers with a greater chance of conversion.
Loyalty is an advantage from a brand perspective too. Loyalists are the backbone of most SMBs, acting as brand ambassadors by spreading positive feedback via social media, word of mouth and other recommendation channels. This creates free, brand-friendly PR which in turn enhances corporate profile and exposes the business to a much wider base of potential buyers.

Acquirers empowering their merchant customers

Responding to a growing demand for digital loyalty-marketing capability across the merchant community, forward-thinking acquirers are now providing their SMB customers with tailored loyalty solutions using SaaS technology. Recent surveys by loyalty solution experts Izicap show that these new acquirer-driven programs are delivering significant and measurable benefits for merchants:

  • 49% increase in revenue attributed to loyalty program sales*
  • 30€ additional turnover per consumer per year*
  • 85% increase in marketing efficiency*

*Data provided by Izicap. Median figures calculated on total loyalty member card transaction

The programs are popular with merchants. Not only do they receive strong and measurable ROI, but the technology empowers them to recruit high-value loyalty customers, analyze purchase behaviors and execute targeted digital campaigns to engage their most loyal shoppers.

Extra stand-out and competitive edge for acquirers

In today’s rapidly evolving financial landscape, more and more acquirers are offering loyalty marketing solutions as a way of differentiating themselves from their competitors, signing new accounts and cementing existing customer relationships. Closer customer partnerships are giving them access to deeper insights into their customer businesses and performance metrics. More widely, these solutions are seen as a win-win at every point in the value chain, opening fresh sources of revenue for acquirers, enabling SMBs to grow their loyalty, sales and margin, and giving consumers a richer, more rewarding shopping experience.

Turning payment cards into loyalty cards

The days of SMBs having to invest in printing their own physical loyalty cards and configuring POS systems are at an end. Now, using third-party SaaS technology integrated within their payment environment, the acquirer can capture purchase data from transactions using existing payment cards and feed into online marketing dashboards for the merchant to instantly review and analyze. This enables SMBs to track their customers’ purchase behavior, spot loyalty trends and pinpoint their most valuable customers without paying for new or updated hardware.

Transforming payment terminals into marketing tools

Today, the merchant’s card payment machine has become much more than a device for facilitating transactions. Using an integrated app, payment terminals can double as a powerful marketing tool that supports instant opt-in for cardholders after their payment has been completed. This enables SMBs to painlessly recruit loyalty customers at point of purchase and automatically create a GDPR-compliant customer file for each cardholder. All of this is possible with no investment required for specialist in-store equipment or new POS infrastructure.

Planning and executing targeted loyalty campaigns

Having automatically recruited loyalty customers, captured purchase information and built an opt-in loyalty database, the SMB is now ready to put its data to effective use. At this point, third-party digital marketing experts working on behalf of the acquirer provide support, helping the SMB user to interpret the data viewable via online dashboards, devise a loyalty strategy and design outbound email and SMS campaigns to target their loyalty customers. By continuously monitoring data trends and campaign performance, the acquirer helps the SMB to fine-tune and optimize its campaigns and deliver the best possible results. This means that even businesses without specialist in-house marketing expertise can easily plan, run and evaluate highly targeted digital loyalty marketing activity.

More loyalty for merchants. More loyalty to acquirers

From recruiting loyalty customers to analyzing data to planning and implementing their own digital campaigns, SMB merchants across Europe are taking full advantage of innovative marketing solutions provided by their acquirer partners. More and more acquirers are seeing the potential of harnessing the power of next-generation payment data technology to grow their revenues and strengthen relationships with their SMB customers.

 

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