Product promotions and discounts are clearly a driving force behind customer loyalty programs—so much so that according to new research from eligibility verification firm SheerID, even though a reported 75% of companies sacrifice margins to offer exclusive discounts, over 84% of companies plan to offer promotions in 2017. On par with the industry as a whole, 64% of those companies surveyed are already offering or planning to offer exclusive promotions to customers such as students, teachers and military members.
“This survey confirmed some facts that we know to be true—customers shop for discounts, and to win their business, brands are willing to sacrifice margins,” said Jake Weatherly, CEO of SheerID, in a news release. “What you don’t want to see are brands that suffer extensive margin erosion due to discount fraud when customers who aren’t eligible for exclusive offers lie to gain access to those deals.”
Sixty-three percent of the businesses surveyed noted that they offer their promotions year-around online (68%), in-store (39%) and on mobile devices (37%)—but the data also show that the majority of these companies verify their customers through coupon codes, email, or by manually checking IDs, all of which are highly vulnerable to fraud.
“We created our verification technology to address a variety of challenges that businesses encounter when creating exclusive programs, one major one being the inability to authenticate someone’s credentials online. Verification technology is a virtual ID check that creates a seamless process for the customer, as well as provides peace of mind to the business,” explains Weatherly.
Of the ⅓ of brands that indicated that they are not offering exclusive deals to their customers, the majority noted their primary reasons for not doing so were not having enough time, a lack of IT resources, slim margins, and the risk of discount fraud. When asked if they would be more likely to offer exclusive promotions if they knew only qualified customers were receiving them, nearly half said yes.
The findings come from a survey of 76 companies nationwide, looking at how they are offering exclusive promotions and what impacts those promotions have on their bottom lines.
Source: Marketwired; edited by Richard Carufel