More people are buying things on their phones and the internet, so buyers expect everything to work well on all of them. This change has made it possible for reward schemes to work across all channels. These apps help you connect with people in a better and more unique way.

In this blog post, we will talk about the main differences between omnichannel loyalty programs and traditional loyalty programs. We’ll talk about the good and bad points of each approach and give you more ways to handle problems.

Understanding Traditional Loyalty Programs

What is a traditional loyalty program?

Traditional loyalty programs are typically single-channel loyalty programs that reward customers for purchases made in-store or online. A lot of the time, these programs use real cards, like plastic loyalty cards or punch cards.

The “buy X, get one free” model is a popular one. This phrase is often used in coffee shops and other stores.

Key features of traditional loyalty programs

This program illustrates the key features of traditional loyalty programs:

• Points accumulate, and customers earn points for every purchase they make. These points can be redeemed for rewards or discounts.
• Tiered systems where expenditure determines tier levels. Tiers usually provide more rewards.
• Redemption processes for a variety of rewards, such as discounts, free products, or exclusive experiences.

The punch card that you can find in many coffee places is a classic example of a reward program. Each purchase earns a customer a punch on their card. When the card is full, the customer gets a free drink or some other prize. Even though they are easy, these programs can work well to get customers to buy from you again and again.

Benefits of traditional loyalty programs

As we said, traditional loyalty programs, while simple, offer several advantages:

• Customers can quickly understand how to earn points and use them to get benefits.
• Tangible rewards, such as physical rewards, discounts, or free products. It can be motivating.
• With a low-tech approach, you don’t need complex technology or digital integration.
• Strong brand association with physical rewards can strengthen brand loyalty.

These tools are simple to set up and understand, but they do have some problems. Often, they can’t get specific information about their customers and give them personalized rewards. Because of this, they might not work as well as more modern reward programs that are based on data.

Introduction to Omni-Channel Loyalty Programs

What is an Omni-Channel loyalty program? 

Omnichannel loyalty programs make it easy for customers to use all of your products and services. In-store, online, and on-the-go are all included. Their technology keeps track of what their clients do and what they like. There are perks and experiences that can be given to each customer that are special.

Key features of omnichannel loyalty programs

Omnichannel loyalty programs enable a more thorough and customized way of interacting with customers. Some of the most important things about these services are:

• Smoothed consumer experience across online and in-store channels.
• Access and analyze customer data in real-time to understand behavior and preferences.
• Cross-channel reward systems allow customers to earn and redeem rewards across multiple channels, such as online, in-store, and mobile apps.
• Personalized experiences based on individual customer preferences.
• Tiered loyalty programs to incentivize higher levels of customer engagement and spending.
• Gamification elements, such as badges, challenges, and leaderboards, to motivate customer participation.

One of the nine great examples of a tiered reward program is Starbucks Rewards. Customers get “stars” for in-store, online, and mobile app purchases.

After that, buyers can trade in their points for more perks. As they get more stars and move up the ranks, they get free drinks, deals, and gifts for their birthday.

Comparing omnichannel loyalty and traditional loyalty programs

Feature	Traditional Loyalty Programs	Omnichannel Loyalty Programs
Customer Engagement	Limited to physical interactions or basic online engagement.	Deeper engagement through multiple channels, including social media, email, and in-store experiences.
Data Utilization	Limited data collection and analysis.	Comprehensive data collection across all channels, enabling personalized experiences.
Reward Flexibility	Often limited to points-based rewards.	Diverse rewards, including points, exclusive offers, personalized experiences, and tiered benefits.
Channel Integration	Limited integration across channels.	Seamless integration across all channels, providing a consistent customer experience.
Overall Effectiveness	Less effective in driving long-term loyalty and increasing customer retention.	More effective in building strong customer relationships and driving repeat business.

Challenges of implementing an omnichannel loyalty program

There are many good things about digital reward programs, but they can be hard to set up and use. There could be a number of problems when transitioning from traditional to omnichannel loyalty. In the next part, we’ll talk more about these problems and look at ways to solve them.

Technical integration

Connecting all systems and technologies is a major difficulty in delivering a seamless omnichannel experience. If you’re still using older systems, it can be hard to connect your web shop, real stores, and mobile app.

For example, customers may be confused and run out of items if your web store doesn’t know what’s going on in your actual shops. This is where many companies have trouble.

So, what’s the solution?

We suggest you look for platforms with features like managing products, fulfilling orders, and managing customer relationships (CRM).

Find suitable apps for you at 10+ loyalty programs software for small businesses.

Customer data management

Managing customer data well is the second biggest problem that comes up when trying to set up an online reward program. It’s hard to get a full picture of a customer because different platforms often have their data tools.

So, what’s the solution?

We recommend you invest in data integration tools. Connect your different systems and make sure that customer data is always up to date by using data integration tools. This will help you make a single picture of each customer that includes their buy history, interests, and personal information.

Customer behavior adaptation

The last hurdle of multichannel loyalty programs is adjusting to changing consumer behavior. When technology changes and people’s tastes shift, businesses need to be able to adapt quickly.

So, what’s the solution?

We recommend following our blog to keep up with the latest trends and change the way customers act. 

Conclusion

In the digital world we live in now, a good reward program needs to change with the times to meet the wants and demands of customers. Traditional loyalty programs are helpful in some situations. However, online loyalty programs are better because they involve customers in more ways and are more tailored to their needs.

If you own a Shopify store and want to launch your loyalty program, check out BON Loyalty. This Shopify loyalty app offers seamless loyalty across channels—rewards online and in-store (POS) shoppers alike.