Traditional loyalty programs reward customers for spending with a brand, and have usually been designed as a way to incentivize customers to visit stores more, drive retail sales, and increase retention rates. Modern loyalty programs have evolved to reward customers not only for spending with a brand, but for engaging and sharing information with a brand about their lifestyle, demographics and preferences.
The business impact of modern loyalty programs is invaluable. Multichannel programs that are able to capture customer data across all digital and physical touchpoints provide brands with rich insight into who their customers are and what they want from a brand. This insight can drive successful customer retention and acquisition strategies, grow revenue, increase customer satisfaction and create memorable, personalized experiences.
Leveraging data to improve relevancy and drive personalized experiences
Using data gleaned from loyalty program activities, brands can start segmenting their customers. Segmentation allows brands to group customers based on where they fall in the product life cycle and how they engage with the brand. Brands can segment customers based on all known data to deliver personalized activities, rewards and brand experiences.
By incorporating activities across all channels and touchpoints, brands can collect a great deal of insight into who their customers are. Here are some of the valuable insights modern loyalty programs can collect and how brands can leverage them.
Email address, birthday and location
These are the foundational pieces of data brands can collect when a customer registers for a loyalty program. This data can be used by a brand to send email communications, localized offers and birthday surprise and delight promotions.
Content and product preferences
When brands offer up content consumption as a point earning activity through blog posts and YouTube videos for example, brands are able to gauge the topics or products being promoted that resonate best with their audiences. They can then leverage this knowledge to target them with relevant promotions or additional related content.
Product purchase, location and preferred shopping method
Brands should award loyalty program members points for making purchases. The data captured informs a brand of what the customer bought, and if in-store, the location of the store they visited. For brands that don’t have access to POS information, adding receipt scan as a point-earning activity, can tell the brand even more about a customer’s purchases, including the other brands and products a customer has purchased. Brands can leverage product and transaction data combined with profile data to make relevant product recommendations, cross-sell and up-sell to existing customers.
Personal style, lifestyle, and habits
Another point earning activity that captures useful customer data is surveys. By asking members to complete surveys based on their personal style, preferences or habits, brands can learn everything about their customers from their skin tone to their favorite color to how often they visit a brand in-store. This information can be used to target the customer with specific products and promotions.
Social media presence, reach, and influence
Brands can incentivize customers to connect their social media accounts to the loyalty program, and share content with their networks. This provides the brand with information on how active their customers are on social media, how extensive their reach is, and how influenceable they are in their networks. This allows a brand to identify social media influencers and reward those who engage most.
New prospect data
By incentivizing members to refer their friends and family as part of the loyalty program, the brand is able to collect information such as email address or location on relevant new prospects. This helps the brand acquire new customers and at the very least expand its pool of prospects and market to them effectively.
Customer priorities, motivators and interests
Loyalty programs offer consumers a catalog of rewards to choose from in exchange for redeeming the points they’ve earned. Redemptions can give brands additional insights into their consumer outside of their purchase and engagement history. Rewards such as a sweepstakes or an experiential reward can reveal a consumer’s priorities and interests. Brands can then leverage this insight to offer customers more of that they want, keeping them engaged and active in the program.