Successful loyalty programs use data and insights to drive value, according to Alex Fovargue, retail specialist, SAS U.K. and Ireland.
“It’s not just about giving cash back,” Fovargue told Loyalty 360. “It’s about analyzing how it’s impacting customer behavior and how that drives the customer experience and customer loyalty.”
Fovargue’s company surveyed more than 2,000 people and compiled a report titled, “Retail Loyalty and the Consumer.”
“We started looking at statistics around people with loyalty cards,” Fovargue explained. “People have multiple cards. Retailers are using that data to give them offers. Customers expect to receive personalized offers at an appropriate time. They are looking for a more personalized experience.”
Here are some key findings from the report:
30% of marketers believe their own marketing efforts are unsuccessful
50% of marketers are unsure about the effectiveness of their marketing efforts
Nearly 82% say having an emotional connection with a brand would likely lead them to make repeated purchases
Nearly 62% of retailers say loyalty programs are effective for gathering customer data
75% of retailers who don’t offer a loyalty scheme say this because they prefer to generate loyalty in other ways – such as through strong customer service or services personalized to a consumer’s needs
40% say they’d be less likely to shop at a retailer that doesn’t offer a loyalty card
88% regularly use loyalty cards when shopping
Nearly 95% of respondents indicated they have at least one loyalty card
Fovargue said marketers now have the ability to become more sophisticated.
“Consumers have raised the bar and they expect personalization,” he said. “It’s forced retailers to do analytics virtually in real time.”
Fovargue said the report also looked at why companies don’t have loyalty programs.
“In some cases, it was about not seeing as much of an ROI,” he said. “For me, customers are expecting you to innovate in the way you’re using the data. There is a gamification of data, using it in more of an engaging way so customers don’t just sit there and earn points.”
Fovargue isn’t incredibly keen on the mobile piece.
“Consumers don’t want hundreds of messages from retailers when they’re not in a shopping mode,” he said. “When it’s being used to engage people, you can view it as another channel to communicate with rather than to emotionally engage.”
About a third of respondents in the report indicated they would respond to an in-store offer via mobile.
“Communications have to be relevant,” Fovargue said. “For young people, it may be particularly a vibrant device to use.”
Most companies are trying to understand the complexity around all of the channels, what’s driving activity, and where they should spend their marketing dollars, Fovargue said.
“How do you catch those interactions and attribute those responses,” he said. “Every CMO is being pressured by his CFO about why to invest in certain channels. At the end of the day it may not be an exact science.”
What should brands avoid?
Fovargue believes there is a potential for misuse of data.
“There is a lot of stuff coming out about using data to go a little bit too far,” he said. “There’s a limit to what customers will actually tolerate. Loyalty doesn’t have to be points-based. It can be about giving members access to content no one else has access to. The challenge with loyalty is it isn’t just about giving a discount.”