How Data-Driven Customer Loyalty Can Help Drive Brand Strategy

Data and customer loyalty seem to go hand in hand for brands, but sometimes it’s much more difficult to seamlessly integrate all the ingredients for an effective and impactful business strategy.

Loyalty360 talked to Excentus CMO Jeff Hassman about this compelling and very important theme.

How can customer data drive both a loyalty and business strategy?
Hassman: Customer data should be the fuel that drives every business. It provides the insights
needed to segment customers and target offers and programs for a higher likelihood of sales and repeat
This is particularly important for loyalty programs. Building loyalty requires ongoing data analysis, infrastructure improvements, attention to ever-changing consumer needs–and more–to remain competitive and stand out from the crowd. Loyalty strategies, rewards, and promotional campaigns must align with business objectives to meet shoppers’ needs.
The insights gained from customer data can help retailers with better inventory management, merchandising strategy, competitive strategy, investment decisions, determining whether existing customers can be leveraged to enter new verticals, and of course, how to approach rewards structures and promotions.
How can loyalty data give you a competitive advantage?
Hassman: When retailers and brands operate through fragmented channels and data silos, they have no visibility into customer behavior–and the whole purpose of loyalty is to change customer behavior.
The direct line-of-sight into customer behavior that loyalty data provides is, in itself, a huge competitive advantage. Loyalty data makes it easier to identify the most valuable and loyal customers and invest heavily in them so they don’t switch to another retailer. It also provides visibility into how customers engage with CPGs and other brands and enables retailers to leverage those cross-brand relationships by optimizing and targeting the right offers and promotions.
Loyalty data helps segment customers; by drilling down to SKU-level data, retailers can present more targeted, personalized and real-time promotions, providing value to customers that drives desired responses. 
Do I need a fully-fledged loyalty program to make more informed, data-driven business decisions?
Hassman: Building a loyalty strategy is no easy feat – it requires time, resources, experts, digital
consumer solutions, offers, technology, a loyalty or rewards engine, vendor management, and
everything in between.
However, at the core of every successful loyalty strategy is data. Whether your strategy includes a fully-fledged loyalty program or not, you need loyalty data to make business decisions. You should design your loyalty strategy to give you access to data you can use, to change customer behavior and drive higher foot traffic, deeper engagement, more satisfied shoppers and increased revenue.

If you do choose a fully-fledged loyalty program, make sure you provide a valuable program to consumers that is easy to use and understand, has an attractive rewards currency, and gives you the customer data and insights to get the right offers to the right customers at the right time.

What are some of the challenges retailers face when deciding to implement a loyalty program?
Hassman: What we often see as the greatest challenge for retailers is the gap between technology and
business objectives. Loyalty requires analytics expertise and quantitative skills not resident in most retail
organizations–and they often have fragmented systems, data silos and multiple vendors who offer little
overall guidance.
Their POS systems aren’t designed to process anything more than transactions, meaning they are unable
to capture valuable customer data or put it into action.
As a result, many retailers and brands believe their loyalty programs are successful despite low membership, little performance oversight and limited intelligence gathered from loyalty data. Retailers need to free data from silos to get a complete line-of-sight into customer behavior–only then can they begin to understand and change their customers’ behaviors with specific loyalty strategies.
How can retailers and brands set their loyalty program up for success?
Hassman: First, have a clear objective. Whether you need a differentiated reward currency, greater mobile engagement, improved targeting capabilities or highly personalized customer communications and offers – being clear on what your brand needs will determine what approach you take. Loyalty is not a one-size-fits-all solution.
Second, have a data-driven strategy. The only way to build direct relationships with shoppers is to listen to the data, measure what works, benchmark performance, monitor competitors and continuously improve your offers and promotions for the best financial outcomes. Financial modeling is also important–loyalty programs are an investment, but good financial modeling will help ensure that your program is not a cost center – it should drive higher revenues.
Third, find the right partners and hire the right expertise to help you implement the right tools to put your strategy into action. Loyalty is about hands-on experience and know-how – make sure you work with a partner that knows and does loyalty every day.
Finally, train employees on how the program works and best practices, measure performance regularly and adjust your approach.
Does a loyalty program guarantee loyalty?
Hassman: No, a loyalty program doesn’t guarantee loyalty. There is still a lot of competition, but it
guarantees greater insight into customer behavior. Without loyalty data, retailers are at a certain
The growth of online retailers and specialty retailers (dollar stores, coffee chains, quick service restaurants) means loyalty is no longer a “nice to have” but a “must have.” The commoditization of many loyalty program benefits is making it increasingly difficult for retailers to retain or grow their share of customers’ wallets. Loyalty data–coupled with best practices such as financial modeling and in-store training–is the key to a successful strategy.
What do I need to consider when implementing a loyalty program?
Hassman: First, ask these questions: Where is your customer data right now, and what changes do you need to make to access and put it into action? What data is missing and how do we capture it? What are the right tools and technologies that will leverage your data and support your business objectives?
Once you address your data (or lack of data), then you can understand your customers– why do they shop here? When do they shop? What types of rewards do they want? How can I differentiate my program and brand?

By understanding consumer needs and what moves them, you can deliver the offers and rewards to retain your best customers, attract new ones, and improve the quality of those relationships–with more spending, more frequent visits and higher engagement with your program.

How do I get loyalty right? How do I get started?
Hassman: Loyalty success isn't just about competitive pricing and product discounts–it’s about staying
relevant to the consumer and pairing customer data with transactional data to change their behavior,
thus, driving long-term loyalty.
Understand how an effective loyalty program could drive more value, and then develop a strategy. A poorly executed program can quickly turn into a cost center – from creating offers and promotions to handling setup and testing, managing in-store signage, social media strategies, training, support, a financial settlement from offer sponsors, budgeting, reporting and everything in between. Know that there are loyalty service providers, like Excentus, that are experts in all aspects of loyalty. Leverage this expertise and efficiency as a core component of your profitable loyalty program.

Finally, don’t be scared to jump in. You don’t have to do everything at once, but the key to getting started is looking at data to decide which offers and promotions will create value for your customer and drive profitable outcomes for your brand.

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