Less than one in five loyalty program members say their program makes them feel special and recognised. Merchants need to improve the quality of their loyalty programs through deeper personalisation to prevent customer churn, increase revenue, and sharpen their competitive edge, according to Loyalty Now.
“Merchants use loyalty programs to create a relationship with their customers. The goal is for customers to spend more and be less likely to choose a competitor,” Loyalty Now CEO, Cary Lockwood said.
“However, most loyalty programs don’t deliver on what could be their biggest benefit to merchants: real-time customer data. The most successful merchants can use that data to tailor their offers more successfully.”
Loyalty Now has identified four areas that can benefit from real-time data:
Merchants can start by determining their most valuable customers, then finding out what they have in common, and what differentiates them from other customers. This information can be leveraged to provide more personalised customer experiences and prevent churn.
Using real-time data lets merchants and consumer brands determine which rewards are more likely to generate interest from their customers. A rewards program that offers highly attractive rewards is one that will generate more engagement and ongoing value to the customer and business.
Product recommendations can be seen by consumers as a blatant grab for cash unless they’re highly targeted. If the recommendation relates specifically to a customer based on comprehensive and accurate data, it will be more likely to resonate with that customer. It may even fill a need they didn’t know they had.
Sometimes a customer just needs a small extra push to complete a purchase they’ve been considering for some time. This could be a discount or a value-add, and it’s important to know what the customer is more likely to prefer so the brand can make the right offer.
“The quality of data is key. Using just one or two data points to drive recommendations could be a recipe for disaster. For example, if a customer has bought a big-ticket item such as a refrigerator, it would make more sense to recommend complementary products rather than alternative versions of the same item. Or, if the customer has purchased a warm winter coat but lives on the Gold Coast, they may be more likely to be going on vacation than preparing for a harsh winter where they live,” Lockwood said.
“The future of loyalty programs is data-driven. Organisations that can leverage data will have the inside running in the race to win more customers and prevent customer churn. Using a platform that facilitates this process will be the difference between a loyalty program that works and one that simply costs the merchant money.”