When it comes to loyalty programs, two facts are simultaneously true: customers love loyalty programs, but the programs themselves can be prone to failure. With 79% of customers more likely to engage with brands that offer these perks, it’s important to close the gap on this issue.
Considering how many modern loyalty programs are data-driven, one likely cause of blunders is that brands are not leveraging customer information efficiently. Businesses need to ask themselves whether they are gathering the right information and leveraging insights in ways that maximize the program’s value. An excellent place to start is adopting the following strategies:
Use more than one loyalty tactic
Loyalty programs have a wide array of options at their disposal when it comes to engaging customers. The most popular programs offer reward points, but discounts and cash-back options can also perform well, depending on industry.
So which should you choose? That’s actually a trick question. Brands should never feel obligated to limit themselves to a single loyalty technique — in fact, offering a variety as a way of attracting a broad range of users is a sound strategy. Take the Canadian bookstore chain Indigo, which recently announced that customers could upgrade free memberships into PLUS accounts with additional discounts.
By adopting this approach, brands benefit beyond appealing to different consumer groups. They also create opportunities to collect additional usage data that can be analyzed for future program optimizations. After all, the best loyalty program is one that can improve and offer increased value as time goes on.
Unify your customer data
Today’s brands have access to a wealth of customer information, but these records tend to fragment across multiple sources and departments. Loyalty programs, for example, often draw insights from customer accounts, preference data, and email responses. While that’s a great first start, it overlooks data points relating to customer demonstrations, location, or advertising.
By aggregating your data from multiple sources, it’s possible to gain a clarified and more accurate picture of customer behavior. That’s not to say data unification is simple — many
teams often struggle to aggregate information that cannot be summarized using a post-it. Thankfully, customer data platforms can aid organizations in unifying data sources automatically, creating profiles based on multiple contact points.
Segment your high-value customers
Once you’ve collected and unified your customer data, it’s time to segment them into useful groups. At minimum, you’ll want segments for each high-value user category, such as frequent spenders who save their points versus those who spend them as soon as possible. This also creates an opportunity to distinguish between customers who collect and spend points directly with your brand, and those who do so with partners — which is one reason airline reward plans are successful with non-travelers.
While the exact information you collect will vary by industry, focusing on the right data points, unifying them, and segmenting customer profiles will surface the most valuable loyalty insights. From there, it’s much easier to enhance engagement and retention among customers while offering them a far more valuable service.