What advice would you give to a company to enhance or start a customer loyalty program aimed at creating meaningful, lasting relationships?
Cindy Faust, VP of Product Management, Aimia, told Loyalty 360 that this process for brands hinges on three crucial elements:
Understand who your best customers are and what will be important to them
Reward interactions and transactions that matter and are relevant for those target groups
Focus on Smart Data (i.e. customer-centric data)
Below Faust details the various types of data necessary to use and understand in a successful customer loyalty program:
Loyalty program data: By connecting purchase data to individual customers, loyalty programs allow you to devise test-versus-control environments, perform customer segmentation, and measure the impact of your marketing offers. With their ability to reward customers based on current and potential value, currency-based programs provide an even richer data set.
Web analytics data: By connecting web search and online shopping behavior to transaction data, you can customize your web experience to the individual. Amazon, for example, famously conducts A-B tests down to the level of font size and color to determine the impact of the online experience on purchase behavior.
Shopper data: For retailers, SKU-level and shopping basket data provides a nearly bottomless source of insight on retail shoppers. Sophisticated retailers use shopper data to influence store design, to optimize pricing, and to help category managers make smarter promotional decisions.
Auction data: Understanding a customer’s propensity to purchase and the price elasticity within an auction environment provides brands and retailers with unique insights into pricing models and consumer behaviors.
Social media data: Just knowing how many Facebook users have “liked” your page tells you nothing about the impact of those “likes” on sales. But what if you encourage customers to connect their social graph to loyalty program membership? You might open a rich vein of data on how social media engagement influences purchase decisions.
Mobile data: Similarly, encouraging mobile engagement through a reward program app can uncover location; offer response, and even in-store behavioral data that can enhance your ability to build relationships through mobile devices and to see things as they happen – in real-time. You’ll learn to focus on offers that enrich the mobile experience, and avoid those that force customers to disengage.
CRM data: By connecting purchase and loyalty data to data flowing from your call centers, returns department, and points of sale, you can develop robust customer profiles that allow you to design differentiated experiences for your most valuable customers.
Third-party data: The ability to overlay demographic, lifestyle, and other third-party data sets on your core transaction data set can unlock insight into share of customer information, help identify underserved markets, and even help develop new market opportunities.
“Today, transaction data represents the floor of your marketing potential, rather than the ceiling,” Faust says. “The potential to tie interactions to transactions, to fuel marketing insight, and to leverage new communication channels to reward profitable behavior more rapidly bodes well for the future of customer loyalty. Marketers that leverage customer-centric data may, with customers’ enthusiastic help, create the future of real relationships.”