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How to Build a New Data Layer With a Next-Gen Loyalty Program

One of the most important challenges that every retailer faces is collecting data and insights. This is essential to deliver relevant communications and experiences to customers. Customers give brands valuable data about their shopping habits: what they buy, whether they shop online or in-store most of the time, what promotions appeal to them. The more relevant the content you are creating, the more likely your customer will pay attention to it and you will be able to convert them. Valuable loyalty program data can not only be used to fuel personalization but also, if the information extraction is done right, provide you with data that your competitors can only dream about.

Architecting Loyalty Programs With Data

Customers expect relevance and personalization. Combining behavioral, emotional, and demographic data your customers willingly share with you will allow you to learn who they are, how you can meet their needs, and how to reward them. Maintaining a high standard of customer experience and delivering personalization are two ways for you to increase customer lifetime value, which will also have a positive impact on your ROI. Loyalty programs are a brilliant way to gather information about customers, so you will be able to achieve all of the above.

According to RedPoint Global’s report, 63% of consumers expect personalization as a standard of service and believe they are recognized as an individual when sent special offers. The report also stated that 54% of customers are willing to share personal information with companies if it will be used to create a personalized experience. With the help of digital marketing platforms and loyalty programs, you will be able to deliver tailored offers to your customers at the right time, on the right channel, ensuring that the offer holds the necessary value for customers.

Recognizing Customers on an Individual Level

Incentivize data collection by rewarding your customers for non-transactional actions, such as providing feedback, leaving a comment on social media, downloading your app or completing a challenge. While performing these actions customers tend to give a lot more information about themselves. You can learn what their favorite products are, what kind of personality they have, what types of rewards they like to receive, and their opinions of certain products.

You can also reward your customers through a loyalty program, for example when they complete a survey. By encouraging them to fill out profiles as part of your loyalty program, you can get data to personalize the customer experience and create more targeted marketing campaigns.

Sometimes you need more than rewards to incentivize survey completion. There is no easier way to learn about your customers’ personalities, interests, and product preferences than in a game-like manner, making it fun and engaging.

As such, gamified loyalty programs are a great way to collect useful information and access a new layer of customer data. Immerse your customers in a like/dislike quiz or show them a selection of images where they can select which option is closest to their hearts. All the information gathered through gamification can be then used for segmentation, better targeting, and offering more personalized rewards.

Fabletics, the American active-lifestyle brand, presents a gamified quiz, where they ask customers about their favorite fitness activities, activewear products, sizes and color combos.

Identifying Your Most Valuable Customers Through Segmentation

Customer data is fundamental to any loyalty program. Without it, companies would not be able to set up customer segments. By creating groups of customers with similar preferences, you will be able to send them more personalized messages and special offers designed around their necessities. This is key because what motivates one customer may not work for another.

A deep understanding of your customers’ desire and discovering what each segment finds the most valuable will help you in identifying your top-tier customers. Companies not only create customer segments according to their needs, behaviors, and demographics but they also aim to determine the profit potential of each segment. A value-based segmentation helps companies specify which segments are the most and least profitable. The better you are at segmentation, the more accurate recommendations you can give.

Providing exclusive products for customers who value exclusivity is one of the ways to creatively reward customers and engage them more. For instance, LuisaViaRoma’s Sneaker Club offers insiders early access to high-end sneakers. Customers will feel personally valued and appreciated when a company creates marketing strategies for each segment, because they are not getting the same treatment as everyone else.

LuisaViaRoma’s Sneakers Club is so popular that sneakers are often sold out before they go on sale to the public.

Delivering The Most Relevant Offers

Letting customers know that the product they were checking out will soon be out of stock awakens the fear of missing out. Customers do not want to be left out of sweet deals! Being on the invite list or in-the-know when it comes to something new and trendy makes them feel special. If only a small group can access a product, the customers inside of that select club will absolutely love the feeling of belonging and become your loyal customers.

Using their geographic location to recommend a coat for the winter. Sending them suggestions of products that might go with a previously purchased item, makes them feel appreciated by the brand. Exceed their expectations and improve their brand experience by surprising them with a spontaneous gift or unsolicited reward. Nothing says ‘I care’ better than a thoughtful gift. Amaze them with a personalized message on their birthday, throwing in a double-point campaign or a small gift.

Surprise & Delight elements make customers feel valued, they build a strong emotional connection between them and the brand, making customers into “die-hard supporters” of the brand. For example, Mastercard surprised their customers within its “Priceless Surprises” campaign. The goal was to surprise customers without them expecting it, rewards went from free cupcakes, Uber rides to free concerts and getaways.

MasterCard is planning to partner with celebrities to continue surprising their loyal customers in the future as well. (Source: Poisepolish)

Better Targeting by Knowing the Preferences of Your Customers

Personalized product recommendations are key to any successful retailer’s eCommerce strategy. Collecting data on customers preferences helps you with more targeted suggestions they may be interested in, based on the products they have already purchased or viewed online. By understanding the way your customers behave online and defining their overall demographic, you will be able to identify the ways in which you can improve the overall customer experience

Helping customers discover products that you think they will love can lead to more conversions, higher order value, and an overall greater trust in your brand. You can increase engagement by incorporating relevant product recommendations to your homepage, product pages, search pages, even on a 404 page. Also, a well-thought out customer experience does not end after the customer has left your site. For instance you can take advantage of other channels, like your email marketing strategy as well, by seamlessly integrating the recommendations into your email templates.

A great example of product recommendations is Beer Hawk’s website, where they have a “Here’s What’s Hot Right Now”, a “Recommended For You”, and when checking out a “Still Interested In These?” section. They give customers recommendations while they shop online, including customer ratings, based on their recently viewed and previously selected items. Also when customers become a subscriber of Beer Hawk’s Beer Club they get 8 beers in the post every 2 months for £24. They also email their members a story behind that week’s beer.

Customers can also collect Beer Tokens with their beer order, which is their unique currency that rewards customers after every purchase or writing a review of a beer.

Data Is Power

The more you know about your customers, the more data you collect, the better understanding you will have about what your customers want and what specific products and services they are looking for. Also, customers are more likely to respond if they receive messages that are relevant to them. With the help of loyalty program data, you will be able to improve your communication with your target market and the customer experience to better fit your customers’ needs.

Knowing the name, age, and interest of your loyalty program members allows you to personalize the communication and the rewards while utilizing digital platforms. Getting your customers to reveal important information about themselves is no easy task. Having a successful loyalty program provides you with insights into behavior, journeys and other vital information. But in order to achieve this, your loyalty program needs to capture customers’ imagination, meet their needs, and be enjoyable at the same time.

Author Bio: Zsuzsa is the Head of Partnership and Marketing, Co-founder of Antavo, the Gartner and Forrester-listed pure-play loyalty technology provider. She was listed by Forbes as one of Europe’s top 100 female founders in tech. She is a former journalist and was awarded the Young Journalist Award by the European Commission.

This article was first published by MAPP. Permission to use has been granted by the publisher.

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