Not understanding this is part of the reason why up to 77% of customer loyalty programs fail within two years, according to a Capgemini Consulting study.
The goal is to use data to better engage customers, not yell at them or sell to them. Successful customer loyalty programs result in higher retention of customers, brand advocates and repeat buyers.
In addition, customers who are highly engaged with a brand and its loyalty program purchase up to 90% more frequently than those who are not.
4 ways in which data increases customer loyalty
Contact your customers where they are
Half of customers say they would buy more if brands communicated better with them. If customers feel that a brand is listening to their communication preferences, they are more likely to engage.
While relevant offers are a big part of that equation, it is also imperative to communicate in the right way and in the right place.
To do this, companies need to understand the channels that each of their customers use, connect these channels and aggregate additional customer data to get a single view of them.
In practical terms, the customer's purchase ID should be connected to their email address, mailing address, demographic information and other data. Companies must understand where their customers like to interact with their brand and open new marketing channels as needed.
MasterBase® tag management makes it possible to relate data to each other and build individual profiles from personal customer information and behavior, including by channel, device, etc.
2. Customize your offers
Three out of four customers are frustrated with websites when content is irrelevant to them. And many customers won't waste their time opening up future communications after a brand makes a large-scale personalization fail.
Loyalty programs offer a great opportunity to collect data from customers, such as registration, web behavior, interaction in email communications, post-purchase surveys or in-store questionnaires, so why not put them into practice?
Avoid digging too deeply into one or two data points, Kissmetrics suggests. A customer who once bought a children's toy may not be a mother, just as a customer who never buys children's clothing might be a parent who hasn't yet been introduced to a brand's children's line.
Instead, it collects data from multiple sources, including demographic, lifestyle and third-party purchase intent behavior. Customers will be impressed.
3. Deliver relevant rewards
How do you incentivize loyalty? Offer rewards that really matter to customers.
Benefits don't just have to be based on purchases. They could include social media interactions, web behaviors, referrals, in-store visits or survey responses.
While customers love to save money, it is important to take into account their expectations and preferences.
For example, take the case above of the mom who never bought children's clothing from your store. Incentivize purchase frequency while cross-selling by offering a coupon on children's clothing or a coupon for a free purchase.
4. Engage disenchanted customers.In the ideal world, no customer would leave or stop interacting. But we are interested in reality. And in it, even the most exclusive brands with the best loyalty programs have disenchanted customers in their database.
These disenchanted customers are still valuable. In fact, 80% of customers who left a store felt the company could have done something to retain them (Accenture). Take this as a lesson to win them back.
Consider using a survey and reward to solicit feedback from disenchanted customers. This gives them the opportunity to let you know what you could have done better.
The metrics of your email messages are also vital for re-engagement campaigns. These metrics identify users who have opened a different message each month. Marketers can segment active users and target them with an aggressive re-engagement campaign.
A solid strategy, driven by actionable consumer data, is key to understanding what motivates customers to take action. With these insights, brands can drive programs that not only increase sales, but gain loyal customers, enhance brand reputation and win you followers.
