Loyalty programs have long been valuable in driving repeat business and keeping customers in touch with brands. However, a more recent form of loyalty solution that rewards shoppers with instant cashback is proving even more effective in driving sales and increasing basket size.
Andrew Thornton, retail industry lead at Tyro Payments, explains that loyalty programs work better if tied to the same cards customers use to pay for goods, overcoming the need to present a loyalty program membership card or recite a phone number to earn points. “It elevates the retail experience while minimising wait times for both the business and the customer.”
Tyro Payments recently partnered with Hello Clever, an Australian fintech company known for its real-time payments and loyalty platform. In an Australian first, the companies enable retailers to reward customers within seconds rather than the up to 90 days typical with traditional earn-and-burn loyalty programs. Tyro offers a card-matching feature that offers card-linked loyalty capability so that when a card is used for payment with a specific retailer – in-store or online – it knows instantly that the customer is a member of the client retailer’s loyalty program and almost immediately, credits the customer’s Hello Clever account after the transaction is completed.
Thornton says that adopting a loyalty program that seamlessly identifies customers when they pay for a purchase is a means of future-proofing your business.
“Gone are the days when you walk into a store, scan your membership card, and then in 30 days, you might get a little deposit in your bank account for some cash back,” he explains. “Hello Clever has created a flow where a customer could walk in and tap their debit or credit card like they would with any other transaction. They can use Tyro’s data to match that against the customer without giving them personal information. It is all anonymous.
“Money back in the pocket is always nice for a consumer, particularly when times are tough.”
Economic pressure boosts loyalty program popularity
Thornton says loyalty programs are becoming more popular in an era of economic pressure where consumers are more conscious of their spending, so for small retailers or large, it has become a competitive advantage and, in some cases, almost mandatory to reward regular customers in some way – and know who those customers are. That might extend from a cafe manually clipping or stamping a card with every coffee purchased to high-profile multi-brand loyalty programs where points are earned across multiple retailers and services and redeemed for flights or products.
“The biggest downfall of those programs is they rely on you identifying yourself. And if you’re in a rush, if the lines are busy, you may not remember to do that. So they start to lose track of who you are, even though you’re still going there, they start to lose visibility.”
“If you make it hard for customers to get points, they’re just going to give up, whereas the idea of this is, why can’t we make it easy for you and make it more consistent for the business? That’s a win-win.”
A vital data collection tool while respecting privacy
For the retailer, The Tyro Hello Clever partnership automatically collects data on purchasing behaviour by tracking spend, at what time of the day, and where, building a user profile that the retailer can deploy to send the customer relevant marketing communications.
Missed transactions – where the customer and cashier have forgotten to scan a loyalty program ID – represent lost data, potentially resulting in a less accurate picture of a customer’s behaviour and less impactful marketing spend.
Most loyalty programs request information from people signing up that provides data points such as age, gender, name, postcode, and other identifying factors. That information is valuable if used with Tyro’s API and Hello Clever – because it can help retailers turn anecdotal information about shopper demographics into factual data points. For example, if they know they are popular with 35-year-old males, how can they target females, or why are they not getting younger or older generations? They may need to tailor some of their marketing to open it up to other demographics to expand their customer base.
Why tracking customer behaviour is vital
“The ability to track customer behaviour through loyalty programs is becoming increasingly important for businesses trying to adapt to the cost-of-living crisis,” says Thornton.
“You cannot afford to make many mistakes or misspend marketing money without getting much of a return,” says Thornton. “The small to medium-sized businesses we work with do not have the resources to afford to make mistakes.”
Thornton cites anecdotal feedback suggesting retailers that have adopted the Hello Clever solution enabled by Tyro have increased the average transaction ticket size. He believes that is because if customers think they’re getting a decent amount of cash back, they may buy a slightly more expensive item or an additional line, knowing they can instantly offset some of the cost.
“The reward a customer gets has to be juicy enough to entice them to do something, but the real value to the business isn’t necessarily the repeat customers; it’s getting to know their customers better.”
Some companies are partnering with charities to donate customers’ cashback rewards to causes the merchant supports – all on the customer’s behalf. Tyros’ card-matching technology offers merchants the flexibility to tailor these solutions in ways that best align with their brand and customer values.
An off-the-shelf solution
Retailers can obtain the Hello Clever solution off the shelf and customise it to the brand and its offer. They can register their business as a Hello Clever merchant, and their customers can download an app and sign up using a QR code displayed in the store. “You can effectively turn it on overnight with next to no effort, and it takes you to a level where you are doing pretty sophisticated card matching behind the scenes,” explains Thornton.
Loyalty applications should not be a burden on a retail business, he says. Hello Clever’s solution is affordable for small- and medium-sized retailers, Thornton says. Businesses pay a monthly fee with the customer insights supplied as part of the service.
“As a store owner, you see only the data of who’s coming to your stores – you are not getting an amalgamation of every customer on Hello Clever’s database; you’re just seeing the insights of who’s been at your locations.”
Cashback programs are popular across all demographics, says Thornton, especially Gen Z, who tend to enjoy instant gratification.
“If you tell them they will get a great reward three weeks from now, they’re less likely to sign up for a loyalty program. We’re in a world where TikTok and social media grab someone’s attention for about six seconds nowadays. Everyone’s attention span is shrinking. People want to see the benefit of an action immediately. More and more businesses and loyalty providers are looking at how they can speed up delivering customer rewards.”
Tyro powers more than 71,000 merchants across Australia with in-store, online and on-the-go payment solutions, creating seamless payment experiences for hospitality, retail, services and health providers, with integrated banking and lending solutions designed to help unlock the potential of every business.
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