Good data management is the DNA to loyalty program success, according to a white paper released by Altair and Loyalty 360 at Loyalty 360 Engagement & Experience Expo.
Sixty-five percent of marketers across a wide variety of industries have implemented loyalty programs with more than 2.1 billion enrolled memberships. The programs themselves are distributing an estimated $48 billion in points and rewards.
The goal of these programs is to increase sales, aid in customer retention and boost a company’s profitability. Many companies with successful programs, including Panera Bread and Kroger, attribute a significant part of their recent growth to their loyalty programs.
Walgreens is expecting to benefit from its recently launched Balance Rewards program.
Despite the success of many programs, other marketers struggle with where to start with such an effort, according to Altair and Loyalty 360, which researched companies throughout North America.
Though data management is a daunting undertaking, with analytics, reporting, predictive modeling and other challenges, it is still critical to a loyalty program, the research says. “Those with a loyalty program reported a higher overall performance, signifying that a focus on loyalty makes organizations more aware of the nuances of data and the power of predictions.”
To elicit the most meaningful insights, the data needs to include internal and external data for a total view of the customer, the research adds. Armed with this information, companies can use it to analyze how to present the right customer with the right message at the right time, leading to enhanced return on marketing dollars, improved customer loyalty and a positive brand image.
Among the most compelling findings of the research:
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Data integration is essential to the success of a loyalty program. More than seven in 10 (72 percent) of firms with loyalty programs said they could integrate data, but still saw room for improvement. Sixty-one percent of companies said data integration remains a challenge.
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More than half of all companies (53 percent) said that data consolidation remains a challenge. Gathering and integrating data from different channels, as well as from internal and external sources provides a comprehensive view of a customer’s interactions with a company.
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Data analysis remains a challenge for 46 percent of companies.
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Nearly half of all companies (44 percent) said that cleansing data is an issue. The challenge is determining key matching elements so that data can be merged into a single view.
To improve data management performance, Loyalty 360 and Altair recommended that firms:
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An analysis of data capabilities throughout the company, seeking recommendations for integration and room areas for improvement
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Develop a data-driven segmentation of customers. This helps firms determine where marketing dollars will provide the best leverage.
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Have a marketing –driven database for quick access to business and customer intelligence, which helps improve the company’s bottom line.
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Deploy a reporting system, which can be done inexpensively through a SaaS solution or other reporting applications.
Download the full white paper Data Management: The DNA to Loyalty Program Success