4 Ways Data Boosts Customer Loyalty

Loyalty programs are proven to deliver big returns.

But loyalty programs are a two-way street. Customers expect to be talked with, not sold at. Failing to understand this is part of the reason why up to 77% of customer loyalty programs fail within two years.

The goal is to use data to better engage customers – not shout at, sell to or push them. Successful customer loyalty programs result in higher customer retention, vocal brand evangelists and repeat buyers. Plus, customers who are highly engaged with a brand and its loyalty program purchase 90% more frequently than those that are not.

Here are four ways data to leverage data to boost customer loyalty.

Personalize Offers

Three out of four customers get frustrated with websites when content is irrelevant to them. And many customers won’t waste their time opening future communications after a brand makes a big-time personalization fail. Ouch.

Loyalty programs offer a huge opportunity to collect customer data – such as at signup, post-purchase surveys or in-store questionnaires – so why not put it to use?

Avoid digging too much into one or two data points, suggests Kissmetrics. A customer who once purchased a children’s toy might not be a mom, just as a customer who never purchases children’s clothes might actually be a parent who has yet to be introduced to a brand’s children’s line.

Instead, gather data from multiple sources – including third-party demographic, lifestyle and purchase intent behavior – and voila! Customers will be wowed.

Deliver Relevant Rewards

How do you incentivize loyalty? Offer rewards that customers will actually want to use.

Perks don’t just have to be based on purchases. They could include social media interactions, referrals, in-store visits or survey responses.

Rewards should match the action. It’s not so different than managing a child’s chores: 30 minutes of housecleaning might return 30 minutes of video game time, not a whole new video game. Likewise, a 10-minute questionnaire might equal 10% off one item, but $500 in purchases might earn a 40% off coupon.

While customers love saving money, it’s important to factor in customer expectations and preferences.

For example, take the previous case of the mom whose never purchased children’s clothes from your store. Incentivize her repeat purchases while cross selling by offering a coupon on children’s clothes or a voucher for a free onesie.

Meet Your Customers Where They Are

Half of customers say they would buy more if brands communicated with them better. If customers feel like a brand is listening to their communication preferences, they are more likely to engage.

While relevant offers are a huge part of that equation, it’s also imperative to communicate in the right way and in the right place.

This requires companies know the channels each of their customers use, connect these channel IDs and add additional customer data to create a single view of their customer. In practical terms, a customer’s purchase ID should be connected to their email address, postal address, demographic information and other profiles. Companies should understand where their customers like to interact with their brand, and open up new marketing channels as needed.

Re-Engage Old Customers

In a marketer’s dream world, no customer would ever become disengaged. But let’s snap back to reality: Even the most unique brands with the best loyalty programs have disinterested customers in their database.

This old customers are still valuable. In fact, 80% of customers who left a store felt that the company could have done something to retain them. Take that as a cue to win them back.

Consider using a survey and reward to ask for feedback from disengaged customers. This gives customers an opportunity to let you know what you could have done better.

Email Activity Metrics are also vital for re-engagement campaigns. Email Activity Metrics identify users who have opened a different email campaign each month. Marketers can then segment active users and place them into an aggressive win-back campaign.

A robust strategy, powered by complete consumer data, is key to understanding what motivates customers to take action. With these insights, brands can fuel programs that not only increase sales, but earn loyal customers, improve a brand’s reputation and win big fans.