Loyalty has provided marketers with a method to achieve an opt-in, permission-based marketing platform and actively collect data about consumers and their activity.  Consumers agree to the data sharing and collection because of the added value they anticipate receiving as a loyalty member.

Today, technology exists to identify and track an individual across almost any channel with and without permission. The permission issue has led to regulations, such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act), to ensure consumer permission is obtained prior to the collection, storage, use or tracking of a consumer’s behavior. 

Since consumers can be identified and tracked across a range of channels and there are regulations requiring consumer opt-in for marketing, is there really a need for loyalty programs anymore?  The question is even more important when considering the current state of loyalty with dwindling participation rates, increases in member accounts being highjacked and redemption fraud.  Should brands even consider offering or sustaining their loyalty program?

Absolutely. Generating consumer interest and engagement leads to loyalty.  Having a loyalty platform isn’t the same as having a loyalty program.  Loyalty programs are isolated efforts focused on rewarding consumers for the purchase or activity desired by the brand.  The majority of brands only use the permission and data collection capability to support the value exchange and economic relationship.  Few brands use the data collected to actually improve the consumer experience and engage members in an evolving relationship leading to loyalty.

With the ability to identify consumers and to track consumer activity at a very granular level, marketers need to shift their focus to enabling a brand experience unique to each consumer.  There is also the need, as well as opportunity, to actually gain insights and apply the insight to the developing relationship between the brand and the consumer.  This is a very different mindset requiring a different set of strategies, skills and technologies. For instance:

  • Members must receive brand experiences aligned to them, their needs and expectations.  Campaigns are giving way to various levels of artificial intelligence to segment and align an offer to a specific member situation to achieve previously unimagined levels of messaging, communication and personalization.

  • Every action a brand initiates with a consumer is an opportunity to learn more about the consumer.  Feedback loops, or the responses by a consumer to a brand interaction, happen in milliseconds rather than hours, days or even weeks.  Brands need to consider a data collection strategy, or consistent, embedded surveying to fuel the targeting capability of the platform.

  • The level of content to support a platform is significantly greater than the content needed for a program.  In this context, content consists of offers, coupons, discounts, merchandise, gift cards, experiences and really anything you could provide to a member based on their need and situation.  The ability to personalize will be severely hampered with a limited amount of content.

  • The evaluation or measurement of loyalty efforts is no longer just contingent on the ‘immediate’ sale.  While conversion is important, a platform approach looks at consumer interactions beyond a single response to a single event.  For instance, it isn’t just about getting a sale or conversion to an individual campaign.  Instead, it is about the consumer’s overall engagement, their perception of the brand and endorsement of the brand to others.  All require new ways to analyze and report on loyalty growth.

There is another reality.  The growth of regulation is actually driving brands to a loyalty platform approach.  The regulations require consumer permission to collect data and the brand to communicate to the consumer what data they collect, why they collect they data, how they will be using the data and who else has access to the data.  Since brands need to share with consumers how they will use the data, it is time for brands to actually use the data to improve the customer’s brand experience.

Get ready, loyalty is about to get real with a focus on the consumer and to actually build relationships leading to loyalty.

 


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