How Loyalty Programmes Can Significantly Boost Digital Customer Engagement

By Guest Author | loyalty programs | September 2, 2020

On one side, you have businesses that operate online with little personal contact with buyers. Then there are retailers as well as B2B where interactions are mostly between humans with very little digital connect.


In both cases, loyalty programmes serve as the bridge for the vital digital engagement. Annexcloud report finds that 80% of future profits come from 20% of existing customers who contribute to over 65% of the company’s business. Put in place loyalty programmes, and you can boost customer digital engagement.

Digital loyalty programs give a boost to engagement

The traditional way of retail stores to offer coupons or vouchers do not work quite as well as expected. Each voucher may have a fixed value, and customers will have to use the voucher to benefit. If they forget the piece of paper, they have to forego the reward. Switch to digital loyalty for digital engagement, and you increase loyalty.

Digital signup and reward

Unlike a retail store, a customer does not have to walk in through the door to sign up for a loyalty management platform. You can digitally market through your website and social channels to encourage prospective customers to sign up and download an app.

Downloading the app itself earns them loyalty points, inducing them to make the first time buyer with further points on a purchase. The reason for having a digital loyalty program is simple: 54% of customers would buy from a company that offers such programs, and 46% say they have bought more because of loyalty rewards.

The digital platform is flexible

Paper-based analogue loyalty is limited and challenging to keep track of. Instead, switch to a digital platform where you have a backend platform that will let you assign several users who, in turn, can control their downstream customers. Such customers are encouraged to download an app that connects to the platform. This benefits both.

  • Platform users can design flexible rewards and redeemable point systems based on specific customer group preferences.
  • Customers download an app, receive points they redeem on the first purchase itself, instead of having to wait till they have accumulated a set number of points. This act can be carried out on the app and could be in the form of a discount on the purchase or cashback to their account or, maybe, doubling points if they do not immediately redeem. Administrators have extreme flexibility to set and track such a rewards system.
  • Customers can find out status using their app and administrators know the account situation of each customer. Depending on purchase behaviors the reward system can be modified with ease.
  • The interactive platform lets administrators request customer’s feedbacks that can serve as inputs for improved digital engagement and satisfaction. 80% of customers desire a customized program.
  • A reward system need not be limited to cashback or discount on the purchase. Customers can accumulate points they can use for holiday vacations, fuel purchase, or buying something else or mobile recharges. Administrators of loyalty programs have extreme flexibility in designing programs that will elicit desired behaviors, keeping customers digitally engaged and happy.
  • A digital reward system need not have an expiry date. This will induce customers to keep buying since they have the option of accumulating more points with richer rewards or redeeming immediately to get a discount or small reward.
  • It is possible to extend the loyalty program to include quizzes, competition, and gamification to deepen digital engagement even more.
  • You could get customers to subscribe to SMS messages and they will commit if they are offered rewards. Oracle Retail finds that 61% of customers subscribe to SMS when offered a reward.
  • Customers can use the app on their mobile to redeem loyalty points and to know the status.

To sum it up: you can design loyalty programs aligned with customer expectations and strengthen digital engagement when your options are flexible. You can offer better value to valuable loyal customers and use the system to encourage underperforming customers to step up.


One way to engender loyalty and strengthen engagement is to use the digital platform to elicit feedbacks and responses. You can easily send out a notification to app users to participate in surveys that will earn points, and you can invite suggestions that will help improve your products and services. Make them feel like stakeholders and their commitment to you increases.

Arwell Electricals, a manufacturer of electrical accessories, engaged with distributors, dealers, and electrical contractors through the loyalty app. They were surprised at the number of good and helpful responses so much that they decided to reward the top suggestions they included. That gesture made the winners and others feel proud of belonging to the company.

Loyalty does not need to operate in a sterile impersonal atmosphere. You have administrators who, effectively, become “group” leaders and are in a position to build personal relationships that further deepen the digital connect.

The app is not the only connecting point in digital engagement; you can easily blend in social media platforms. Interactions become interesting and rewarding because you are now building an open community where customers connect not only with you but also with other customers. Emotional connect through digital channels means a customer has a 306% higher lifetime value according to Motista.

Track, manage and derive intelligence

A paper trail is difficult to track, manage, and derive actionable insights. Make it digital and each action and behavior goes into your database from which you can derive intelligence that will help you refine and pinpoint strategies even better.

The beauty of digital loyalty connect is that it need not be restricted to larger businesses. Giant B2B operations, wholesale, professionals like doctors, and even the grocery retail market can go digital in loyalty programs, attract new customers, and retain them over time. You could engage loyalty experts to take care of the programme to drive digital customer engagement or simply use a loyalty platform with an app for the same purpose. Do it and see the difference.

Rakshit is a content marketer at LoyaltyXpert, a loyalty program company in India. He holds spectacular skills in loyalty programs, marketing, and customer retention.