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Why You Should Consider Integrating Your Loyalty Program With Your Point Of Sale

As CTO of Engage People Inc. Len Covello helps companies differentiate loyalty programs to deliver a better experience for their customers.

Published September 1, 2022, 8:00 a.m. EST

Loyalty programs were created to drive repeat business, and to that effect, they are usually successful. However, many brands fail to integrate their loyalty program seamlessly into the shopping experience. In these cases, it becomes cumbersome, difficult to navigate and, therefore, not a benefit.

From the customer perspective, an experience with high friction can derail the most well-conceived program. Above all, customers today want a loyalty experience that is “easily accessible, user-friendly, and real-time,” according to the results of a survey from Deloitte. As CTO of Engage People, a loyalty program company, I’ve found that the point of sale (POS) is the most effective way to curate that experience for customers shopping both in-store and online.

The POS has evolved into much more than a cash register at check-out. Today, purchases often happen on a mobile device, like a smartphone, and the transaction can happen inside or outside of the physical store. Integrating loyalty into the POS can optimize the program and help create a more convenient and seamless experience for the consumer.

Brands can also realize advantages in integrating loyalty at the POS, finding that they can often have a stronger connection with customers and a way to interact with them both online and in-store, as well as build a more extensive loyalty network. The Deloitte survey results also showed that 64% of brands said they have incorporated loyalty at the POS and beyond to ensure the program is accessible at every touchpoint of the shopping experience.

Here is what we found that integrating loyalty at the POS can help do:

Drive Convenience: Convenience is vital to the success of a loyalty program. Insights from a survey on customer loyalty conducted by the Corporate Executive Board and published in the Harvard Business Review more than a decade ago summed it up perfectly (paywall): “Companies create loyal customers primarily by helping them solve their problems quickly and easily.” It went on to advise that brands make the shopping experience easy by removing obstacles.

Nothing has changed. Customers continue to want an easy shopping experience, and providing easy access to the customer’s personalized program, available rewards and shopping preferences at the POS helps deliver convenience. To optimize this convenience, retailers could also provide access to a customer’s available perks or discounts and allow them to pay with points or redeem rewards, creating a cohesive experience in which rewards are earned, redeemed and viewed all at the POS.

Unlock Growth Potential: When the barriers to participation are removed through a more convenient experience, retailers could benefit from increased program membership and an expanded loyalty network. A bigger customer base can drive more store traffic, increase visits from customers that are invested in the brand and improve conversion rates, creating a greater chance for increased sales volume.

Facilitate Data Collection: Combining the purchase with loyalty participation creates a mine for data collection. Brands can collect data and gain insights on shopping behaviors and patterns that can help inform business and sales strategies, including expansion opportunities, cross-category spending and new product launches. Grocery brand Kroger is a prime example of how loyalty data can be harnessed to drive sales. Using customer data from its analytics company 84.51º, the brand sends 11 million unique offers to customers each quarter, and it sees a redemption rate of 70% in six weeks.

Data collection does come with responsibility, however. Brands should be transparent with customers about the data that is collected through the program and how that data will be used. When leveraged responsibly, data can seed tremendous benefits.

Create Better Engagement: According to research results from Deloitte, a seamless and integrated experience is among the top ways to effectively compete in today’s loyalty landscape—and integrating loyalty at the POS is one way to enhance customer commitment to the brand. But the most successful strategies look beyond customer loyalty to customer engagement. An engaged customer is more involved in the program from the time they earn rewards to the time they use them—and beyond. This means that customers don’t just earn and spend points but are also more likely to participate in special events, sales and promotions. An integrated program also gives brands an opportunity to create moments of engagement. Brands can attract customers back to the store with a special offer or other incentives that can be automatically redeemed at check-out.

Consumers operate in a digital world. Integrating loyalty at the POS can expand that digital environment and improve the overall customer experience. Loyalty can then become a more seamless part of the customer’s journey, and the program has a greater chance of being successful and impactful to the retailer’s business.

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