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A loyalty program can be a powerful tool for a retailer, especially when it is filled with insight on customers’ needs and desires.
Loyalty360 caught up with Phil Seward, regional director, Americas, ICLP, to find out how loyalty marketers can augment their offerings and build sustainable customer relationships in 2017.
It seems that loyalty programs now must become more creative to acquire and retain customers. As 2017 unfolds, what do you foresee as far as changes that loyalty marketers need to make to achieve this end result?
Seward: In 2017, traditional, impersonal rewards programs will become increasingly obsolete. Therefore, retailers will need to utilize big data to better understand customers’ individual needs and desires. As ICLP’s research reveals, 74 percent of US consumers would buy more if they were better rewarded with relevant and timely offers, emphasizing the power of using personalized programs that genuinely ‘surprise and delight.’
Retailers will need to up the ante on creating individualized customer journeys by further analyzing the mass volumes of data yielded from mobile and social networks. By augmenting core transactional data with rich behavioral data such as likes and interests, location tracking, entertainment preferences, and social influence, retailers can deliver a more personalized engagement and increase the likelihood of customers recommending their brand to others, which is vital for acquiring new customers.
What makes some brands savvier than others when it comes to executing and managing a loyalty program?
Seward: Creativity is often at the forefront of loyalty initiatives, and while retailers are having to work harder than ever to differentiate their programs, they must exercise caution to prevent them becoming unnecessarily complicated. Members need to be able to easily see the correlation between their participation and the benefits available to assess the value of their membership. Many savvy brands offer a meaningful benefit from day one — this is a great way to demonstrate value and utility of your brand from the onset of the customer relationship.
Even if a loyalty program is successful, should brands look to tweak it based on VoC insights to keep it fresh?
Seward: Even the most successful brands should plan to adapt and evolve their loyalty programs to ensure they remain in lock-step with ever-evolving customer needs. But retailers should tread carefully by balancing new ideas with an understanding of which program features are driving current customer value. Despite the best intentions, retailers can quickly experience negative customer feedback when making poorly planned changes to their programs. It’s really all about finding that sweet spot between continually cultivating devotion among engaged customers while conceptualizing fresh elements that will make your brand stand out.
How can brands communicate more effectively with customers?
Seward: Effective communication is critical to driving the passion and intimacy that is essential for creating the strongest customer-brand relationships, but consumers will expect it to be increasingly more relevant, timely, and delivered through their preferred channels. According to ICLP research, 53% of U.S. consumers would purchase more if brands were more communicative with them. It’s a cyclical process. The more devoted a consumer feels toward a brand, the more frequently they shop, the more they spend, and the more willing they are to be brand advocates. In 2017, retailers should continue to place an emphasis on making customer communications more personalized and delivered via customers’ preferred channels and devices.
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