January 14, 2019 CPG, Customer Experience, Financial Institutions, Loyalty Strategy, News, Personalization, Retail, Telco, Travel & Hospitality

Trends Disrupting Loyalty: Going Beyond Points

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Make no mistake here – we’re not suggesting brands do away with points or get rid of currency entirely. You can make your program look like whatever you want it to. What we’re suggestion is thinking outside of points in terms of structuring your loyalty program. Many brands hesitate to implement a traditional program because of the liability that may be associated with points. This requires marketers to gain additional buy-in and expertise from their financial and legal teams. Or, some brands see points-based loyalty as another deep discount mechanism that lacks differentiation from one business to the next.

Whether you choose to structure your program strategy with currency (points, miles, high fives) or without, the real benefit is the data you receive through loyalty mechanisms. Designing a program that’s not pure points play still fulfills the promise a brand makes to members, that in exchange for data, the brand will deliver on personalized offers and content.

Loyalty opens the privacy doors and has its foundation in a two-way value exchange between your brand and your customers. Structured correctly, a customer who agrees to participate in loyalty will allow you to collect their data and openly give you more data. They will raise their hand and tell you when they are interacting or purchasing with your brand. They’ll also openly provide you profile and preference information. We can all relate to how it’s a different feeling if a brand that we visit frequently knows something about us – let’s say, expecting a baby – because we said “this is me, this is my information,” versus a brand that has managed to tie data points together to infer a major milestone, then sending offers.

The fundamentals above are the basis to hyper-personalization. With collected and attributable data, you can curate targeted offers or fuel a recommendation engine that upsells and cross-sells with remarkable ROI. Loyalty data can also provide deep insights to benefit the rest of your organization, from buyers, to operations, to development teams to merchandising to real estate.

Loyalty is also the key to unified omni-channel experiences. Marketers continue to struggle on how to communicate with customers in one voice. Loyalty technology allows brands to break down data silos between business units to create a data-rich customer GoldenProfile and center repository on which to action smartly, personably and with one comprehensive view across any channel.

Data can show you countless facets of your business that can guide your strategy and overall GTM. Are you seeing churn from your best customers? Are your campaigns attracting customers who can be inspired to stay with your brand for their lifetime, or are you bringing in one-and-doners? Once you know the value customer interactions bring to your brand and what the insights point to, you can plan an approach to using the data in an effective way.

Going beyond points and using the data at your fingertips allows you to build emotional connections with customers by messaging on what’s important to that customer, rather than sending mass discount-focused messages, while building out the experiences that solidify bond loyalty.

42% of customers would pay more for a friendly, welcoming experience and 65% find a positive experience with a brand to be more influential than great advertising. Looking across demographics, 86% of buyers are willing to pay more for a great customer experience.

Effective use of loyalty data includes: defining customer segments, building customer journeys and anticipating your customer’s next purchase or need.

We see brands like Nike and Joann crafting the campaigns and experiences from their loyalty data that build emotional bonds with customers. By knowing who their customer is and what they want, Nike, for instance, was able to partner with outside brands to fully encompass their customer’s wellness journey, while also creating communities offline and online that are passionate about their sports and athletic progression. Ulta moved away from mass discounting to targeted messaging that grew a cult following to a point where they were able to bring in high-value brands that they couldn’t as a discount brand. And Joann has used loyalty data to identify distinct customer segments as well as their highest value customers, to deliver offers and promotions that are more impactful.

It’s an education opportunity to rethink what we always classified as ‘loyalty.’ With a single identifier and strong value proposition, marketers need not depend on points to guide customers along their loyalty journey.

 

Trend #2: Leaving Discounts Behind

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