It’s getting tougher to cultivate customer loyalty. Traditional programs have driven loyalty by rewarding customers with discounts across the entire customer population.

However, research shows that consumers want a more personalized shopping experience, and tomorrow’s loyalty programs need to offer a personalized shopping experience. Loyalty programs need to maximize relevance by recognizing individual customers and offering those customers discounts on products or services personalized to them and encourages them to be loyal.

Delivering new experiences

A personalized customer experience requires building a program around customer recognition, and rethinking each customer touchpoint and how to use the wealth of insights and data retailers have learned about their customers over the years. Used properly, this data can help retailers offer faster service, better advice, and consistent, personalized experiences across all touchpoints—resulting in a competitive advantage for the retailer.

Research shows that consumers want a more personalized shopping experience, and tomorrow’s loyalty programs need to offer a personalized shopping experience.

The key to success is first understanding the customers’ needs, identifying the value proposition the retailer can provide, and then select the technology that will enable delivery of that experience. Some retailers are engaging with customers through their mobile phone or smart phone from their Wi-Fi networks, however not everyone has a phone.

Another option, is radio frequency identification (RFID) embedded in the loyalty cards.The RFID sensors can help retailers identify specific customers in order to match the right products and services to them. With RFID, retailers can uniquely recognize a customer as he or she walks in or around a store, then automatically trigger interactive signage or Kiosks to display targeted discounts or offers for that customer.

These offers could be for products customers typically purchase, or offers based on a customer’s loyalty level. In addition, RFID can speed-up checkout, since customers are automatically recognized, they no longer have to dig through a purse or wallet to locate their loyalty card or credit card, or type in a telephone number.

Making a case for RFID

Many of the benefits of RFID are discovered only during pilots, so it is best to test and learn with the objective, in this example, of delivering personalized real-time marketing. The benefits can be impactful: Assuming that 70 percent of a store’s revenues come from loyal customers, and that targeted offers and other content will cause 5 percent of them to buy more, the result will be a 3.5 percent conversion improvement. Once installed, the RFID infrastructure that helps create this targeted customer experience can also enable the retailer to improve inventory management by tagging goods to monitor out-of-stocks and increase cross-sell.

In addition, longer-term impacts of customer loyalty can be achieved by delivering personalized content and offers that make customersfeel connected to the brand. These improvements, enabled by the RFID loyalty card, can keep customers engaged and coming back.