BHN’s Jay Jaffin on Behavior-Driven Loyalty and Customer Retention

1. How do behavior-driven incentives improve customer loyalty compared to traditional points-based systems? 

Traditional points programs often ask customers to wait and build up points, track balances, and figure out when and how to redeem. It’s not always intuitive, and it doesn’t always feel rewarding in the moment. Behavior-driven incentives flip that model by responding to what customers are doing right now. If someone makes a repeat purchase, refers a friend or downloads an app, they can receive a reward almost instantly. This immediate reinforcement for desired behaviors is incredibly effective in driving engagement, brand loyalty and repeat behaviors in addition to streamlining operating and marketing costs. 

Today’s technology makes this approach painless and more relevant than ever. APIs and embedded reward solutions allow brands to deliver rewards frequently and at just the right moment, across any channel. Whether it’s a digital gift card delivered immediately after a purchase or a reward for completing a survey, these interactions feel seamless. Behavior-based incentives are not only more engaging than traditional points-based systems, they also give businesses valuable data to better understand what drives customers. This data provides unique insights into each customer as it analyzes which incentives are most used, how they are redeemed and so forth—leading to more personalized and powerful future marketing efforts. Add in robust data analytics and AI that BHN and Exchange Solutions bring to the table together, and you have a robust engine to drive behavior and sales. The end result is a more dynamic, personalized, loyalty strategy that keeps people coming back.

2. How does this collaboration help brands deliver omnichannel loyalty experiences across digital touchpoints?

At its core, this partnership between Blackhawk Network (BHN) and Exchange Solutions equips businesses to deliver connected, omnichannel loyalty experiences that keep customers coming back.

Our collaboration helps businesses enhance customer engagement strategies and relationships via tech-integrated loyalty programs and rewards—featuring smart solutions that help make loyalty more valuable for businesses and consumers alike. Pairing our collective expansive rewards network and powerful digital loyalty technology, we’re helping businesses custom-tailor their marketing efforts by leveraging available data to deliver consistent, personalized experiences across every channel. In addition, we make storing and accessing store rewards in the moment seamless to customers with our omni-wallet solution.

Whether a customer shops in-store, online or through an app, their omnichannel activities and brand engagements should feel worthwhile and meaningful. That’s where our partnership comes in. With real-time data and our digital solutions, brands can offer tailored incentives (e.g., physical or digital gift cards) and customized marketing promotions based on how, when and where consumers are engaging. These data-backed solutions can be applied for a variety of activities like taking advantage of promotions, providing an online review, referring a friend, or hitting a spending milestone. Timely, personalized incentives and rewards go a long way in turning everyday interactions into lasting loyalty. And on the backend, it’s just as seamless. The solution is scalable, fast to implement and doesn’t demand major, often expensive, IT resources. That means brands can focus more on engaging customers and less on backend logistics—providing a true win-win for brands and their customers.

3. What are the key factors in creating a frictionless and rewarding loyalty experience for consumers? 

A few factors matter most: Personalization, ease of use and speed.

Rewards must be relevant and personalized to be optimally effective. Consumers expect loyalty experiences to reflect their behavior and preferences, and the technology exists today to ensure each customer has their own personal brand connections. When brands use real-time data to hyper-personalize their marketing efforts and predict future customer behavior, loyalty programs are more tailored and rewarding for everyone involved. Brands that make people feel seen and appreciated as individuals are much more likely to drive loyalty over time. 

Loyalty programs also need to be simple. If earning or redeeming rewards is complicated or slow, consumers lose interest. Friction in the process—like clunky sign-ups, limited reward options or confusing redemption steps—drives people away and onto the doorsteps of your competitors. Conversely, smooth omnichannel experiences that meet people where they are can drive repeated, ongoing interactions and lasting brand loyalty.

Lastly, rewards should be delivered quickly. Consumers want to see value soon after they take action as well as before they make a purchase. A rapid reward loop—where customers can earn and redeem rewards in a short time frame (also known as “earn and burn”)—is a successful strategy to keep them interested and coming back while also positioning your brand top of mind. Our collective data analytics, promotional engine and AI speaks to customers wherever they are in their journey. Thanks to modern marketing technologies, offering frictionless omnichannel experiences is painless and cost-effective. 

4. How can businesses use loyalty programs as a tool for long-term customer retention rather than short-term rewards? 

Loyalty programs work best when they’re built to drive customer connection, not conversion—experiences vs. transactions. Instead of offering shortsighted rewards and incentives like a one-time discount, businesses can leverage rewards to create intentional, ongoing touchpoints. Our research  has consistently found that reward-based promotions that are custom-designed and personalized significantly outperform discounts and other short-term rewards. 

Here's why: One-time (often discount-based) promotions don’t encourage future or follow-up behaviors from your customers. Yet it’s these long-term behaviors that build long-term brand loyalty, affinity and engagement. Reward-based promotions—especially those that are custom-tailored—optimize your marketing spend through repeat sales and customer engagements. 

This kind of approach simply makes better business sense—especially since modern marketing technologies offer data on customer behavior over time that informs which rewards will resonate most. Rather than giving away margin through blanket promotions, brands can use personalized rewards to drive better loyalty that actually grows the bottom line. Our research1 uncovered that businesses that offer reward-based promotions have reported experiencing massive cross- and up-sell revenue, increases in annual revenue, year-over-year improvements in customer lifetime value (CLV) and higher average profit margins per customer. Smarter, long-term marketing strategies that encourage repeat touchpoints are demonstrably better at driving customer loyalty.

5. How do gift cards and alternative payment solutions integrate into next-gen loyalty strategies?

Prepaid and gift cards are consistently among consumers’ most desired rewards across a spectrum of use cases and applications—and it makes perfect sense. They’re accessible no matter where customers are (in-store, online, in-app), easy to disburse in a variety of forms (e.g., physical or digital cards), offer expansive choice via the brands and networks featured on the cards, can be delivered almost instantly digitally and are widely accepted as payment tools. For loyalty programs looking for flexibility and scale, prepaid and gift card rewards are a perfect fit, as fulfillment isn’t one-size-fits-all and brands only need to pay for what they need (eliminating excess inventory from sitting around idle). 

In a world where cash is still king, stored value and gift cards provide a unique alternative to cashback or credit to account where there is no cost reduction and often no overspend.

Further, many prepaid and gift cards can be customized to include branding features like branding and personalization for individual customers as well as pre-scheduled delivery. This added touch helps drive loyalty not only by creating a halo effect where consumers are reminded and feel positively toward the brand that issued the reward, but because recipients also feel seen and appreciated as individuals as opposed to faceless shoppers. 

6. What industries stand to benefit the most from this new approach to loyalty program innovation?

Tech-informed marketing and customer loyalty strategies are relevant across countless industries—and through this partnership, industries like retail, travel, grocery, healthcare, fuel and C-store and automotive are particularly poised for success. These modernized, data-informed and flexible loyalty strategies offer no shortage of applications as delivering positive brand experiences becomes increasingly important in nurturing loyalty.

With BHN’s loyalty solutions, businesses can get deeper insights into how their customers spend and what drives them to come back. That data allows them to create more relevant rewards, increase repeat visits and boost average order value. For industries where loyalty can shift quickly, a smarter and more modern rewards and incentives approach like the ones we power can make all the difference.