Brands Need Personalization and Relevance to Succeed in Customer Loyalty

Jenna Flateman Posner, senior vice president, strategy, Clutch, believes that, because their goals have always been so acquisition-focused, most brands see enrollment as the key success metric. But, she said that customers have preferences and needs that must be considered, and personalization and relevance must be at the forefront of any successful and sustainable loyalty program.

During a Loyalty360 webinar, “The Misalignment of Loyalty,” on Tuesday, presented by Clutch, Flateman Posner examined the challenges brands have with customer loyalty and offered options to those paths.

Flateman Posner talked about being a member of Sephora’s highly successful Beauty Insider loyalty program, but she had a poor experience that left her re-thinking her membership.

“My needs and expectations for the program were not met,” Flateman Posner told attendees.  “The problem is a lot of programs aren’t going beyond enrollment. CRM is where data goes to die. Its biggest problem is it’s not really designed to create output and analytics and intelligence in a very scalable way.”

What’s more, consumers are “way too smart” for one-size-fits-all loyalty programs, she said.

“Every consumer will have a different expectation about what loyalty means to them,” Flateman Posner explained. “Every consumer represents a different level of value and potential.”

The challenge, she said, is looking at loyalty with a data capture strategy to inform campaigning and communication.

“Every opportunity to personalize is an opportunity to enhance and create an emotional experience with a customer,” Flateman Posner explained. “It all comes down to data.”

Why do brands have loyalty anyway? To identify their customers, she noted.

Flateman Posner offered three key things a loyalty program should do:

 - Data capture (aggregate into single platform),
 - Segmentation (based on value)  
 - Automation and personalization (efficiency and relevance) = 1:1 connection to a brand. This will drive genuine loyalty, Flateman Posner noted.

Customer management + loyalty:

  • Unlimited segments can be configured and automatically managed and reported on
  • Segments based on specific conditions in the data (spend/non-spend)
  • Members are moved in/out of segments in real-time based on the assigned criteria
  • Triggered loyalty engagement campaigns target a specific segment(s) to drive personalization and relevance.
Enrollment should be customized:
Member enrolls; Capture member behavior; inform member profile; drive dynamic segmentation; earn/burn + engage;

“Loyalty should identify, understand, and motivate the customer,” Flateman Posner said.

Demographics (enrollment, data capture)
Loyalty (segmentation, data augmentation)
Engagement (personalization, loyalty engagement)

A huge problem with most loyalty programs, Flateman Posner said, is that brands have to wait six months to a year to have enough actionable transactional data to retarget and remarket to their customers.

But what if there was a faster way to qualify customer value from Day 1? 

“That’s how Clutch uses third-party data append,” she explained. “By appending third-party data to include household income, location, social affinities, cognitive insights, and even political affiliation, brands can start understanding early the innate qualities that make their customers who they are. With retroactive analysis, brands can create an ideal customer persona with these unique attributes. Align that with historic response rates and from Day 1 and you can model and rank newly enrolled customers based on their potential. This is how brands can start accurately predicting value and point their retention dollars at customers more likely to become valuable. If you really focus on personalization and relevance, there are ways beyond discounts and offers to increase customer value.”

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