How LUX Rewards created a luxury rewards brand and increased average transaction value by 3x
With James Courtney, Founder and CEO of LUX Rewards
- Products used
- Transactions API
Coffee, lunch, manicures – the chances are that most of us have a loyalty card for at least one everyday item. But what about high-end brands? Why couldn’t a luxury bar or restaurant reward its customers too? There was a gap in the market and James Courtney, CEO and Founder of LUX Rewards, knew it.
LUX Rewards launched in 2016 - a loyalty platform for high-end spend. Luxury restaurants and bars are able to reward customers with equally indulgent perks. Customers earn points whenever they spend at participating restaurants and bars and once they’ve racked up enough points, they can choose from rewards like spa days, wine tasting tours or charity donations.
James saw the primary challenge to earning users was overcoming the inconvenient customer journey that the LUX Rewards app currently supported. It was filled with unnecessary steps, creating friction and enrollment drop-off.
“When we first built LUX Rewards, the customer journey through the app was very sticky” James explained.
Customers would need to download the app, enter their bill amount at a restaurant, generate and present a unique code to staff, who then entered the code manually into a system to register the reward. For customers, it was inconvenient. For participating merchant partners, they were also forced to re-train staff to use the system too. There was another problem. Due to technical limitations, James and his team were only able to capture about 50% of transactions.
James had considered alternatives and workarounds. Photograph receipts? Sadly, that didn’t work either. “We were only able to capture about 10% of transactions using receipt scanning” explains James. “It meant even less visibility over customer behaviour and was actively deterring some from using the app”.
“Fidel makes earning rewards so much easier. Both our restaurant partners and users love it. Card-linking has helped us increase our retention rate, improve our proposition to restaurants and drive higher lifetime value for them.”
James needed a sleek, engaging way for customers to earn rewards, that could also provide improved visibility of valuable transaction data back to restaurants and bars. A product built on top of the payment cards themselves seemed like the best solution.
Not only would users instantly get rewarded at checkout, but LUX Rewards would also be able to capture 100% of linked-card transactions.
“Card-linking works so well for LUX Rewards because it’s discreet” says James. “We cater to a specific segment of people who dine at high-end restaurants and bars. The only way those people will sign up is if the customer experience is effortless”.
It was this understanding that led James to consider Fidel’s payment APIs as a viable technology to build the new and improved LUX Rewards app on top of.
Users could simply link their chosen credit or debit card, and automatically earn points. It would be a seamless experience without any additional steps at checkout, would require zero additional staff training and LUX Rewards wouldn’t have to rely on expensive and unintuitive hardware. Finally, LUX Rewards would have secure and clear visibility of card-linked transactions – James knew that customer retention and lifetime value (LTV) could be drastically improved as a result, too.
The integration process between Fidel and LUX was fast and easy, thanks to the simplicity of connecting to API technology. The improved LUX Rewards app was ready to go to market and went live in November 2019.
It’s safe to say, James was pleased with the results. 85% of active users have linked their cards since the new version of the app since launch. What’s more, those users are also spending more when they visit participating merchants. From January to March 2019, LUX Rewards increased its average customer transaction value (ATV) three-fold.
“Fidel makes earning rewards so much easier” says James. “Both our restaurant partners and users love it. Card-linking has helped us increase our retention rate, improve our proposition to restaurants and drive higher lifetime value for them”.
So what’s next for James and the LUX team? Naturally, they’re continuing to strive for nothing short of excellence when it comes to their user experience, and have plans to roll out to more cities across the UK. Their target is to surpass 1,000 restaurant partners and 100,000 users over the coming year.