Amex Urges Merchants to Embrace Digital Loyalty’s Hyper-Personalization Mandate

If a business doesn’t meet its customers’ needs, its competitors will be happy to.

That’s increasingly the reality for businesses today.

In an era where consumer expectations around convenience and personalization are at an all-time high, digital loyalty programs have emerged as a component for businesses looking to stay competitive while capturing greater customer lifetime value.

“Customer loyalty isn’t a new concept, but it has evolved,” American Express Vice President and General Manager of Amex Offers Erin Frankcombe told PYMNTS. She noted that digital coupons, reward points and loyalty statuses that unlock enhanced benefits are now table stakes for meeting customer expectations.

While loyalty was traditionally cultivated through direct, personal interactions between shop owners and patrons, the modern landscape has been transformed by digital-first expectations and approaches, where convenience and seamless experiences across mobile and web platforms are prioritized.

Still, customer loyalty is here to stay, with rewards and loyalty programs adapting to evolving consumer spending behaviors.

“We see four key themes shaping the loyalty and rewards landscape,” Frankcombe said, citing that businesses need to adapt to hyper-personalization, sophisticated targeting, embracing a digital-first approach and reward-savvy customers as urgent priorities.

But while embracing those themes may seem daunting for some merchants, there is no need for them to set up a digital loyalty program on their own.

Partnerships can be invaluable in providing reward and loyalty solutions that help businesses maintain a competitive edge and foster lasting customer relationships, Frankcombe explained.

Evolution of Digital Loyalty Programs

In today’s world, where customization is expected in all aspects of life, from social media feeds to coffee orders, the bar for personalized offerings has never been higher.

Through rich data and insights, Amex Offers — a platform from American Express that provides card-linked offers tailored to customers based on their location and spending habits — matches value from merchant advertisers to the most relevant shoppers, Frankcombe explained.

“Each card member might get different offers that are even tailored across different Amex card types,” she said, driving increased engagement and loyalty while delivering personalized experiences at scale.

Offers are also easy to add and earn, she said.

“There’s an opportunity [for merchant advertisers] to drive spend at specific times of the year or at significant moments — think Valentine’s Day, Mother’s Day or even Cyber Monday,” Frankcombe added, stressing the importance of focusing on value delivery versus sheer reach.

As for how it works?

Amex’s integrated payments model provides merchants with insights into Amex’s high-spending card members’ spending patterns. This data-driven approach allows for more effective customer targeting, performance measurement and business growth.

For instance, Frankcombe explained that a regional retailer can use Amex Offers to help attract new shoppers in a specific area or increase frequency among existing low-frequency shoppers, using a cost-effective and ROI-positive method for business growth.

The Importance of Ease of Use

Offering all the rewards in the world wouldn’t matter if the target customer struggled to use them, or they weren’t relevant. This is particularly true across eCommerce and mobile shopping, the rise of which has underscored the importance of ease and convenience in the customer journey.

Given this backdrop, a key differentiator for Amex Offers is its integrated payments model.

As Frankcombe noted, Amex operates as a card issuer, merchant acquirer and payment network, providing unique insight across the payment transaction. This integrated model, coupled with Amex’s global footprint, is a tool for merchants to help drive business.

“We can expect rewards and loyalty programs to continue to adapt to customer spending behavior by focusing heavily on hyper-personalization, unlocking growth today and into the future,” she said.