Program Case Studies

How Samsung Rewards Changes the Loyalty Landscape

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Samsung Pay is one of the most widely accepted mobile payment systems in the world.  Since it’s conception in 2015, the app has evolved to accommodate every form of payment, including gift cards and – most recently – loyalty cards.  However, the most exciting development is undoubtedly Samsung Rewards: the world’s first mobile payment loyalty program.

samsung rewards homepage

But let’s back up for a second.  If you’re anything like me, you might still be a bit unclear as to how mobile pay actually works.  Without this knowledge the concept of Samsung Rewards is a bit confusing, so let’s break it down.

 

What is Mobile Pay?

Over the past couple of years, mobile pay has become a prominent feature in offline retail.  With the average household subscribed to 29 loyalty programs, customers’ wallets kept getting fatter and fatter.  Mobile pay was developed as a response to this phenomenon.  Considering the average customer spends 2.8 hours a day on their mobile device, the most obvious way to make payment convenient is by combining the two!

samsung rewards how it works

Now, shoppers no longer have to carry wallets stuffed with debit, credit, loyalty, and gift cards because apps like Samsung Pay allow customers to load all of these cards onto their phone.  All they have to do is open the app, scan their fingerprint, select the card they want, and presto!  They’ve completed their payment – all without fumbling for their debit card.

samsung rewards growth

As someone whose wallet is still bursting with cards, I find it hard to believe it can be so easy!  Statistic don’t lie, though.  Mobile payment revenue will exceed $75 billion dollars this year, and is expected to surpass a whopping $503 billion by 2020.  Clearly customers are excited about the possibilities of mobile pay, and this enthusiasm is what inspired Samsung Rewards.

 

How Does Samsung Rewards Work?

Once I understood how mobile pay works, I found myself asking the next logical question: what is Samsung Rewards?  As a self-proclaimed loyalty specialist, I like to think I’ve seen it all.  But even with my fount of knowledge, I couldn’t begin to imagine what a loyalty program for mobile pay would look like.  I assumed it would be complicated and multifaceted, and this made me sceptical of its potential for success.

samsung rewards even more

Well, you can imagine how silly I felt when I discovered that Samsung Rewards looks and feels an awful lot like any other loyalty program.  Every time a customer completes a purchase with Samsung Pay, they earn 10 points that can be redeemed for a variety of gift cards, prepaid Visa cards, and Samsung products.  

samsung rewards tiers

They’ve even included four different customer tiers to encourage customers to participate!  The more I explored the program, the more convinced I was that Samsung must have read our guide on how to build a loyalty program like the world’s best.  After all, they have everything we’d recommend when building a successful and engaging program.  

samsung rewards phone into wallet

Yet even with all of these amazing features, I still wasn’t satisfied.  I found myself wondering why they need a loyalty program in the first place.

 

Why Does Samsung Pay Need a Loyalty Program?

When I first asked myself why Samsung Rewards exists, I found it difficult to come up with an answer.  I mean, if people want to use mobile payment systems they’re probably going to end up choosing one randomly since there’s so many to choose from.

It was this line of thinking that sparked my “Eureka!” moment and helped me understand the reasons for developing Samsung Rewards.

1. Service Differentiation

As I mentioned earlier, the profitability of mobile payment apps is accelerating very quickly.  This is partly due to the fact that most people are glued to their phones, but also due to the increase in mobile commerce.  

samsung rewards mobile commerce

Mobile purchases currently account for around 19% of all ecommerce sales in the U.S., and this is expected to grow to 27% by the end of 2018.  With so many people looking to complete purchases on their phones, it’s no surprise that people are quickly adopting the concept of mobile pay.  This interest prompted tech giants like Apple and Google to design a bunch of mobile payment apps in order to stay ahead of the curve.  

samsung rewards google search

Competition is so high that there are already pages and pages of articles outlining the pros and cons of each app.  These market conditions make it very difficult for customers to choose an app and puts pressure on companies to make their service stand out.

Enter Samsung Rewards.  Just like any other industry, a loyalty program gives Samsung the opportunity to differentiate their brand from the competition.  By promising additional value and convenience, Samsung is able to appeal to their customers’ motivations and market their product as more than just a way to pay.  More is more, and this mentality will prompt customers to choose the brand that promises something extra.

2. Improve Customer Experience

79% of customers would go to a competitor after a bad experience with a brand.  This looming threat makes customer experience an important aspect of every sales transaction.  It’s especially important in highly competitive markets like this one, since there are many other mobile payment apps out there vying for shoppers’ consideration.

samsung rewards get rewarded

Loyalty programs have been proven time and again to improve a brand’s customer experience.  Offering additional value through rewards automatically improves a shopper’s opinion of a store because customers are largely motivated by greed.  The more they can get for less the happier they are, and this positive experience encourages them to invest in developing a relationship with the brand and its services.

samsung rewards reciprocity

These relationships are what encourage reciprocity between a brand and its customers.  When Samsung Rewards gives customers rewards to show how much they appreciate them, it becomes not only a convenient option for the customer but a profitable one, too.  In turn, customers are more inclined to return that appreciation with future purchases.  This two-way exchange inspires each party to continue supporting the other, resulting in a positive experience that keeps customers coming back.

3. Prompt Engagement

This goes hand-in-hand with excellent customer experience.  Shoppers are more likely to engage and build relationships with brands that offer exciting experiences, and customer loyalty is an excellent way to foster this excitement.  

samsung rewards tiers phone view

Samsung Rewards encourages engagement with customer tiers.  After enrolling, customers are divided into four distinct groups: Members, Silver, Gold, and Platinum.  The more purchases a customer completes, the higher their membership level.  As they move up the ranks, customers are rewarded with more points per transaction to help them earn rewards faster.

samsung rewards engage

While this strategy works well for most brands, it is exceptionally effective for Samsung Pay because their entire business depends on customers completing purchases.  Combining this basic framework with Samsung Rewards gives them the opportunity to maximize a customer’s desire to choose their app over someone else’s.  The more transactions they make the more benefits they reap, solidifying Samsung Pay as a fixture of the customer’s lifestyle.

4. Develop Brand Advocacy

I know I sound like a broken record, but competition is high in the mobile payment industry.  That means that customers have two options when deciding which app to use: research online or ask their friends.  encourages engagement with customer tiers, which means new customers are more likely to ask their friends than conduct research online.  This puts pressure on brands to do whatever it takes to build a customer base that is willing to advocate for their products and services.  

samsung rewards referrals

With Samsung Rewards, Samsung acknowledges these customer behaviors and leverages loyalty to help build an experience that people want to talk about. They understand the power value has to foster good relationships, and use that power to take advantage of the fact that encourages engagement with customer tiers.  

samsung rewards referred customers

These advocates bring new business whose encourages engagement with customer tiers, giving Samsung a significant advantage over competitors that don’t inspire a high level of referrals.  As Bonnie Raitt once said, you’ve gotta give them something to talk about, and Samsung Rewards embraces this with easily attainable rewards and tiers that create excitement through each transaction.

 

How Samsung Rewards Changes Loyalty

So what does this all mean?  Clearly, Samsung Rewards was developed as a response to the high level of competition, and is being used to overcome it with engagement, advocacy, and delivering great customer experience.

samsung rewards rewards changes loyalty

There’s still one question left to answer: how does this program change the loyalty landscape?  Being the first loyalty program of its kind, it’s bound to have a significant impact on the competitive market.  The answer, like the program’s structure, is surprisingly simple:

 

The bar has been raised.

 

Before Samsung Rewards was released, mobile payment apps were all operating at the same level with the same acquisition and encourages engagement with customer tiers.  Their customer count was purely based on how well customers understood the way the app functions and whether they liked the interface.  Now, customers are going to begin to expect additional benefits and rewards as Samsung’s loyalty strategy becomes the norm.

samsung rewards cards in one place

This leaves Samsung in an excellent position.  As the innovator, they’ve established themselves as a forward-thinking brand with customer experience and value at the heart of their business.  Competitors, on the other hand, will be forced to come up with something new and exciting to set their brand apart.  Moving forward it won’t be enough to copy the existing model.  Customers will be looking for something fresh and new, and won’t be interested in anything less.

With that in mind, congratulations to Samsung Rewards for revolutionizing an extremely impactful component of ecommerce!  From now on, newcomers will have to step it up or step out.

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