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The loyalty space is ever changing. A mere decade ago, we weren’t talking about data the way we are now, and personalization, if mentioned at all, only came up when we were discussing the most luxurious of products and experiences. Keeping up with change in loyalty has been a non-stop challenge for brands, and that challenge is inseparable from the opportunity to connect to consumers in increasingly meaningful ways.
Aimia is a loyalty vendor that has tracked these changes whenever and wherever they have occurred. A global data-driven marketing and loyalty analytics company, it keeps tabs on the loyalty trends that are driving today’s consumers—and the trends that may change the loyalty space in the future.
[Webinar: Loyalty360 Executive Perspectives - The Brand Guide to Tackling the Challenge of Data and Analytics, presented by Loyalty360 and Aimia]
To learn more about these trends, Loyalty360 recently spoke with Sara Galloway, Aimia’s Director of Loyalty Consulting. Galloway provided considerable insight into the changing loyalty landscape, and touched on topics ranging from “hyper-personalization” to approaching data acquisition to a movement toward simplicity in loyalty marketing.
How do you think customer loyalty has changed over the last few years?
The landscape is changing so drastically, and a lot of that is centralized on how people are viewing data and the necessity to keep that data safe and use it wisely. That leads into the two areas where we see loyalty shifting: one) centralized on data security, and two) once you have that data, how do you make sure that you’re using it in a smart way?
On the first front, what we see most of our brands and our client partners saying is there’s a general concern for how data is being stored and how data is being captured. With regulations such as GDPR attracting a great deal of attention right now, brands are beginning to focus more on the data that they house and how they use that. Because of this, we see more of our partners looking to use loyalty as a way to work within these stricter requirements and within these guidelines to continue the brand-to-consumer conversation, i.e. collecting (and eventually actioning on) that data.
Secondly, I think generally, because there’s a growing trend in data security, customers have a larger interest in the data that is being shared and how it’s being used. This means the customer has more control than they have ever had in the past. We see the empowered consumer really taking over right now, and because of that, loyalty can’t be a one size fits all mechanism anymore. It has to be more personalized, which means the brand, based on the customer agreeing to volunteer data, says, “I’m going to take your data and use that wisely to give you a valuable experience with my brand.”
Now, of course there’s that fine line of creepy versus cool, especially for using customer data to personalize without crossing the line into invasive. We want to make sure that you walk that line wisely. That’s really where we see brands going with the smarter use of data. We see this all the time. 65 percent of consumers say that personalization and promotions are most important to them while they’re shopping. On the flipside of that, there’s this massive whitespace, because 23 percent of consumers say that they’re actually happy with the brand personalization that they’re receiving today. I think the time is now to be smarter with the data that’s being used. Consumers are asking for it, the regulations are saying it’s a requirement. We see that’s where the industry is shifting overall.
What we saw is that from a technical perspective, marketers feel they don’t have the technical wherewithal skillsets to really execute these new customer loyalty efforts. Do you see that as a challenge as well?
I was having a conversation about that with a partner of ours earlier today. It’s not only the tools, but it’s the lack of resources to fully execute loyalty efforts. This is where partnering with a vendor can help relieve brands that are strapped for resources and expertise. The number one rule is—especially on the data security side—you should always make sure that you’re choosing a vendor that’s going to be perceptive and be on the forefront of where data regulations are going. Then, what do you actually do with the data once you have it? And how do you make sure that the tools that you have in-house are making it easier for you? Make sure that you’re getting the right data to the right places within the organization at the right time.
Then there’s the flipside. If you’re really trying to get hyper-personalized with the experience, sometimes that does in fact require more resources. One of the brands that I was talking to today said, “If we’re making my purchase conversion offer hyper-personalized based on where the customer enrolled, what they’re purchasing, what their preferences are, and the channels they’re engaging in, I potentially need to have 500-plus creative assets to map to every experience that the customer could go to. Now all of a sudden, I have to take all these different asset and inventory shots—that’s just a lot of work, and I don’t have the resources to do that.”
My perspective on that is, make sure you’re being smart. Number one, the technology that you’re using should not detract from making your job easier. If you’re choosing an ESP, make sure that it’s able to feed in the right content, at the right time dynamically, without your brand managers having to do that manually for you. On the flipside, not every single touchpoint for the consumer requires hyper-personalization of that kind. It’s about really being smart with your resources, and that’s where the marketing tools come in to play. Understanding that there are times when it’s important to enable that data personalization and go into that “cool” effect. Then there are times when that’s just not needed to get the next level of engagement.
Everyone’s very focused on their job requirements and the stylization within an organization. Do you think managing around that is a challenge as well? Does that go toward the resource constraints that you see or is that something different?
I think they complement each other. I’ll give you a common CPG example, where all of the brands work in silos, and they all have their own P&Ls with their own objectives, exactly as you were talking about: “I have my job description. I need to hit metrics across that.”
What we’re seeing with loyalty is that it’s the bridge that allows employees to go between each of these descriptions without necessarily taking away from their initial requirements of the job. If you’re doing loyalty intelligently, then it should be making people work smarter-not-harder with the data that they have to enable that, making it easier to cross over into other areas
I’m not sure that’s necessarily related to, “Do they have the acumen of all the technologies out there?” Maybe it is; we live in an agile world and it adjusts pretty quickly. I think if you have the right tools in place, they should be working for you, not the other way around, which in turn make the job requirements easier to accomplish
What is the next big thing for customer loyalty? Is there something that your clients are asking consistently of you that you think is the next big thing?
It’s funny. I don’t actually think it’s anything hyper-innovative. I think that with access to more data, consumers and brands are being more focused on personalization. I think what that means as far as the next big thing for loyalty is that we’ll likely start to see brands move away from the big, always-on or blanket discounts, the general value-exchange program design of a spend-get model.
We’re going to be moving towards highly targeted, personalized programs that speak to the customer in their moment of need, and truthfully can change throughout the lifecycle of a customer, with a brand to not only enhance the customer experience, but also make sure that (from a marketing side) you can be smarter with the spend that you’re putting out there. Consumers are being super vocal about it and/or dictating what they want their loyalty program to be.
The customer is going to drive that. It’s not going to be the business driving loyalty based on their objectives to drive upsell or cross-sell. It’s going to be the customer saying, “Here’s what I want. Design a program that’s tailored to me. Give me what’s important. In exchange for that, I will do a lot for you. I will speak about your brand, buy more from you, stay with you longer. I’m willing to try new things, new channels, and be innovative with you in exchange for you truly listening to me and giving me what I want.”
Do you think that there are brands that are doing that exceptionally well? That simplicity that you talked about?
I think we have brands that are trending towards that, especially when we look at the Amazons of the world, and how that has shifted. They’ve taken a need of the customer, which is “make it easy for me to get my things.” That need and brand adjustment has completely shifted the way the market has turned.
We’re seeing more and more brands leaning into that experience. I’ll use one retail client as an example. They do a great job of really listening to the need of the customer. They want a high experience program and engagement with the brand where not only are you getting a value from the brand, but you’re being listened to. You get access to different events, and you can create different experiences based on the products that you engage with. They lean a lot on their employees to do this.
I think that there are brands that are leaning towards this, and the great thing with this client is that they’re doing that across all of their channels. They’re implementing this “ease/removal of friction” across store, across e-com, across customer service, across social within their loyalty program, which is the umbrella that connects everything. They’ve kind of embedded that into their brand, hyper-focusing on the personalized experience for their customer.
How should brands be adapting to different regulations and stricter data compliance challenges?
The general thought is pretty simple; if you’re going to ask for data, tell the customer why you’re going to use it. I think just with that simple introduction the conversation becomes easier. It relates to loyalty specifically, because loyalty is a very upfront, mutual exchange and agreement between the brand and consumer, e.g., share information, share your preferences, share what you’re buying, share stuff that you’re comfortable with, and in exchange for that, the brand will give you a benefit that truly means something to you.
So, the customer is raising their hand again. Immediately, you have the ability to work smart within those stricter data regulations. Loyalty is an enabler to create deeper and more meaningful personalized experiences, because the consumer has opted in. That’s where the strategy comes in, making sure the consumer has opted in.
The second part to that, and we kind of hit on this a bit earlier, is that vendor selection is really important. When handling data of any kind, brands and partners should be looking to make sure that they’re selecting a vendor that’s going to be proactive about data security. They’re voluntarily being on the lookout for what’s new, what’s happening in the market, how they can make sure that their data is secure. There should never be a question with your vendor that they aren’t going to be doing what’s in the best interest for the consumer and for the brand with the data that’s being housed.
“Don’t partner with someone who isn’t on top of data regulations” ought to be added to the brand management handbook. Galloway also raised a great point in noting that transparency is really the solution to today’s data and privacy issues. Transparency allows for trust, and it’s needed; the consumer demand for increased personalization isn’t going anywhere soon.
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