The world has become increasingly interconnected, and in an era marked by internationalization, e-commerce businesses are inevitably looking beyond their domestic markets to seize opportunities for growth on the global stage. However, shopping behaviors are changing worldwide as costs of living remain a top consumer concern. As such, consumers have grown more discerning, prioritizing value and price-sensitivity in their purchasing decisions.
To navigate the complexities of the global e-commerce market, businesses must be agile and adopt strategies to retain and attract customers. This is particularly crucial for small and midsize businesses (SMBs), which often operate with limited resources and may face challenges in reacting swiftly to external pressures.
Yet amid these challenges, rewards and loyalty programs emerge as a lifeline, offering SMBs the chance to win over shoppers with personalized incentives tailored to their preferences. In a landscape where consumers seek value and personalized experiences, leveraging rewards and loyalty can be a powerful strategy for SMBs to differentiate themselves with a view of retaining and diversifying their customer base for continued growth.
Creating real value in exchange for consumers’ dollars
For SMBs, establishing customer loyalty programs is a reliable way to create genuine connections with consumers. Research has shown that 57% of shoppers tend to spend more with the brands to which they feel loyal to.
This is particularly important as 62% of shoppers are now turning to rewards to offset higher prices and work around limited cashflow. There is also a trend pointing to the usage of loyalty and rewards programs to acquire essential goods and services.
In today’s inflationary environment, keeping existing customers loyal and converting new ones requires creating real value. It costs far more for businesses to acquire a new customer than to keep an existing one, and loyalty programs can be a cost-effective method to improve retention.
By implementing a loyalty program that offers compelling incentives and rewards, SMBs can effectively encourage repeat purchases, ultimately fostering greater trust and enhancing customer retention and loyalty over time.
Going from “enough” to “more” with AI
Although a generic loyalty program is a good starting point, it will not be enough to sustain SMBs’ long-term growth strategy.
Given that individual expectations vary significantly among consumers, this further highlights the need for personalized approaches in engaging them. This is where AI solutions play a crucial role, as they can analyze customer profiles and purchasing behavior to target them with specific rewards tailored to their preferences.
However, obtaining high-quality data is only achievable with scale, and for many SMBs this will mean leveraging a third-party platform instead of manually poring over insights from a limited sample size.
The next generation of AI tools will allow SMBs to send shoppers personalized rewards that are updated regularly, for example every time a purchase is made or after browsing a website on which a previous purchase was made. Live-tailoring rewards to established shopping behaviors will prompt consumers to check in and shop more often in search of useful offers.
As AI-driven personalization becomes more widely accessible, SMBs must consider investing in automated and targeted rewards marketing to remain competitive to reach the right consumer at exactly the right time.
Customer experience will make or break loyalty programs
These programs must transcend mere functionality, catering to each customer’s personal preferences while ensuring accessibility and ease of use. In today’s dynamic landscape, where digitally savvy shoppers demand seamless interactions and options, streamlining the customer experience will be instrumental in ensuring the effectiveness of loyalty programs.
Like the payment process, convenience and seamlessness are non-negotiable. That means minimizing points breakage — points that expire or become invalid — or other unredeemable benefits. Rewards are ultimately a trust-building exercise where each successful redemption inspires long-term loyalty.
Furthermore, SMBs must recognize the wealth of opportunities to be found within the challenge of navigating complex customer journeys that span across borders. Each cross-border transaction not only represents a business interaction but also offers invaluable insights into customer satisfaction and relationship dynamics, serving as a cornerstone for personalized experiences.
Partnering with a payment provider equipped to analyze this data will become imperative to succeed in the global marketplace. Such analysis not only streamlines expansion efforts for SMBs but also paves the way for a more strategic and personalized approach to loyalty programs.
By integrating the right loyalty and rewards program, leveraging targeted insights, and maintaining dedication to enhancing customer experience, SMBs can position themselves for sustained growth in the years ahead.
