5 Tips on Leveraging Beacons for Customer Loyalty Programs
Last Updated:  April 6, 2018
A slew of connected technologies and an increasing smartphone adoption rate has lead to an increase in the number of informed and empowered customers and communities. This has created a need for businesses and brands to interact and deliver enhanced and personalized brand experiences to its customers. Brands should thus focus on not only improving customer engagement, but also brand loyalty. The traditional approach to building brand loyalty was through offering loyalty cards, loyalty stamps and coupons. However, powerful new technologies like iBeacon technology help take traditional loyalty programs a step higher, by offering tailored, data driven and hyper-local experiences.
In this post, we discuss why beacons should form part of your brand’s loyalty program, some best practices to follow and a few interesting real life deployments of beacons in loyalty programs.
Why you should invest in beacon based loyalty solutions
1. Ease of use
Beacons provide an easy way to do away with traditional loyalty cards, loyalty stamps and coupons. All loyalty related information and points can be saved directly on customers smartphones (on the brand’s app) and updated when customers receive new points. Even in the case of collecting loyalty stamps, beacons help simplify the process. A customer in the range of the beacon will automatically be awarded loyalty stamps directly on his/her smartphone. Beacons at various locations in the store can also be used to nudge customers to collect such stamps.
2. Helps gather valuable data
Using beacons you can gather a wealth of data around customer behaviour and preferences. Some of the key loyalty metrics that can be captured using beacons are visit frequency, repeat visitors, retention and cross-store visits. The data granularity that beacons provide can be used by businesses to measure the effectiveness of promotional loyalty efforts and make changes if required.
3. Efficient and Effective
Beacons are definitely among the most cost effective way to not only initiate customer engagement but also improve brand recall and build customer loyalty. Beacon based loyalty efforts are known to have a higher success rate than traditional loyalty approaches, where the customer plays a passive role in building the relationship.
4. Trigger store visits
Well designed, personalized and engaging loyalty programs using beacons can not only effectively engage customers in-store, but can also entice online shoppers to visit the store, in order to redeem the loyalty rewards. Alternatively, stores can also offer facilities such as “click and collect” functionalities, where customers can order online and directly receive the purchased items in store, giving another opportunity for stores to attract online users to engage in beacon based loyalty programs.
5. Multi-contextual use
Beacons are low cost transmitters that connect to customers through an app on their smartphones. Through such beacon-enabled apps, stores can push a wide variety of content, like promotions, navigation support, store assistance etc. that are tailored to different contexts and time intervals. Beacons allow stores to easily change promotional campaigns, thus, enabling stores to initiate multiple campaigns through the same app in order to achieve different business goals. Popular beacon loyalty solutions include incentivizing purchases, incentivizing visits/time spent, providing discounts and, incentivizing for contest enrollments among others.
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Best practices for beacon-based loyalty programs
Now that we have discussed the benefits of using beacons for in-store loyalty initiatives, let us look at some of the best practices that can be leveraged for implementing beacon-based loyalty programs.
1. Send precisely targeted content and promotions
Beacons allow stores to identify the precise location of customers in the store. Hence, if a store wants to promote a specific product, it can trigger custom notifications to customers who walk into the zone where the product is placed, as against sending a blanket message to all customers in the store (which would lead to many lost impressions). Beacons can also track dwell time in the store; loyalty programs can be designed to incentivize customers who spend a certain duration in the store, thus heightening the likelihood of purchases as well.
The versatility of beacons not only support basic promotional requirements, but also complex contextual requirements. Beacons can be leveraged to not only incentivize purchase and provide discounts, but also to deliver unique solutions like broadcast videos, collect feedback, run contests and give spot rewards. For instance, if a store wants to improve its mid-night sales, it can run a prize promotion through beacons that increases the chances of winning the prize at midnight.
2. Promote data sharing
Beacons are built on the core premise of personalization, hence gathering customer data and insights is the backbone of most beacon based initiatives. Data is especially critical for beacon-based rewards and promotions, in order build trust and create valuable relationships with customers. Precise data leads to well targeted and personalized promotions, leading to better conversions and higher customer satisfaction. Businesses should have a transparent data policy and encourage customers to opt in and voluntarily share their data. It is equally important that businesses clearly communicate the need for such data and convey the benefits of the approach from the very beginning. This will lead to building mutual trust and long standing relationships.
3. Send reward points reminders
Most often, customers are not aware of the exact balance in their loyalty account, hence beacons at specific locations in the store, like entry points or billing counters can be used to send loyalty points reminders to customers. Such reminders are usually appreciated by customers, as the accumulated loyalty points can be offset against the purchases they make in the store.
4. Gamify the experience
Gamification is definitely the most exciting part of beacon-based loyalty programs. Gamification of loyalty provides an opportunity for businesses to introduce fun as well as motivating elements in order to achieve business goals. Experiential promotions and incentives, such as a treasure hunts can lead to a positive behavioural shift in the customer.
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In an interesting example, Macy’s recently conducted a beacon-based promotion called ‘Macy’s Black Friday Walk In & Win Contest’ in order to increase it’s Black Friday sales. As part of the promotion, customers had to get ahead of the crowd and enter the store in order to instantly win gift codes, trips to New York, makeovers and other prizes. Such gift notifications were broadcasted directly to customers’ phones via beacons.
5. Collect Feedback
Beacon based loyalty programs also create opportunities to collect customer feedback instantaneously. Be it a restaurant or a store, feedback/surveys with regards to various aspects of the loyalty program can be collected directly through customers’ phones in order to understand the customer sentiment towards the initiative.
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Interesting examples of beacon-based loyalty programs
1. Seattle Seahawks
With the intention of enhancing game day experience for fans, American Football team, Seattle Seahawks introduced a beacon based mobile app. The mobile app was built in order to connect with fans on a personal level, based on their traits and mobile behaviour. Seahawks also installed around 250 beacons in the stadium to send out relevant notifications and discounts at team shops as part of their loyalty program.
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Seahawks believe that the real power of beacon based loyalty programs is the value of the analytics it captures. Important metrics like where the fans come from, engagement rates with attractions in the concourse and how concessions impact sales are gathered through beacons.
Sephora is an excellent example of using beacons to promote loyalty. Their ‘Beauty Insider’ program is an effort to connect and drive loyalty with their customer base. The ease of having a contextual beacon-enabled app for their loyalty program as against using plastic loyalty cards was the prime motivator for the initiative.
Sephora offers a variety of loyalty notifications to customers, depending on their location in the store. While there are general messages that are pushed to customers in the store, there are also special “get a mini makeover” notifications that are sent to customers near the store’s Beauty Studio. Beacons are also placed near billing counters in order to send notifications with regards to individual loyalty points.
The starbucks reward program ‘My Starbucks’ is a great example of championing customer loyalty. As part of the program, the Starbucks app incentivizes regular purchases and also allows for easy pre-ordering and convenient mobile payments.
4. Bob Hope Airport
Beacons at the Bob Hope Airport at Burback, U.S sends customised offers and special discount notifications to passengers as part of their loyalty program. The initiative aims at improving in-store experience by sending targeted offers to passengers based on their location and proximity to stores and restaurants in the airport.
The app also allows passengers to select their favorite offers, scan for new offers and redeem offers of their choice
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Beacons are a great way to leverage customer loyalty and can practically be used at any indoor location be it retail stores, restaurants, stadiums, cinemas and events. Using beacons, organizations can not only precisely target customers in physical locations but also continue to entice and build relationships with online customers. Thus, beacons provide the perfect platform to provide personalized and experiential customer engagement in order to boost customer loyalty and brand value.
If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!