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Building a Next-Level Customer Loyalty Program

5 minute read
Nathan Eddy avatar
A customer loyalty program shouldn’t focus on your brand preferences — it should be all about the customer.

Omnichannel loyalty programs can be one of the most successful tactics for boosting revenue and encouraging customer allegiance.

However, putting together an outstanding loyalty program requires CMOs to go the extra, innovative mile, with a "next level" program making data central to marketers’ efforts.

After all, data is at the heart of uncovering and solving customers’ pain points, which can lead to increased loyalty, especially in a competitive landscape.

Marketers who are getting it right use customizable messages based on customer data in-the-moment to ensure the right messaging reaches the right person at the right time.

Data, Analytics Drive Personalization

"Offering points and rewards are not enough to keep a customer engaged and coming back," said Carrie Parker, vice president of marketing at Cordial. "Instead, buyers want relevant, personalized surprises and delight from brands, including value in the form of personal communications and offers."

Advanced analytics and machine learning models help marketers take the guesswork out of determining what’s in the best interest of customers. Instead, they create unique experiences for each person based on specific preferences or predicted needs.

"This helps them deliver more personal, relevant and timely experiences that keep customers coming back and engaging more deeply over time with the brand," Parker explained.

From her perspective, marketers should use customer data through sources like browsing data, cart abandonment statistics, previous purchases and other first-party, customer-centric information to develop customized content based on individual actions.

"With this data and data technology, marketers can empower their customers to share their own information, use advanced audience segmentation to create relevant experiences and provide greater convenience to the consumer — ultimately building that brand trust," she said.

Brett Lawrence, business consultancy director at digital consulting firm Inviqa, said one question loyalty programs often forget to consider is whether they should design a best-in-class experience first, but at the risk of not being able to find a technical solution to support it.

The other consideration could be whether to invest in a solution first and then have the customer experience constrained by the technology’s limitations.

"There’s no simple answer, but when looking for partners, ensuring that your stakeholder set includes a single agency that can design and deliver ensures a holistic approach that doesn’t paint you into a corner from the start," he said.

Related Article: Eliminating Vanity Metrics From the Analytics Portfolio

CMOs Should Involve Wide Range of Stakeholders

Lawrence explained that the stakeholders you need to include in the development of your loyalty program will vary from organization to organization.

"Marketing, commercial and digital will always have a degree of interest and influence, but a forward-thinking approach would look to consider a much wider range of interest," he said. “Start by identifying your overall business ambition and the specific objectives your scheme must achieve."

From there, map out the key players associated with those goals, as well as those who will design and deliver the program.

Parker added that outside of consumers, one key stakeholder to consider is customer service.

"Customer service representatives have their eyes and ears set on knowing how to satisfy consumers,” she said. “They’re a valuable resource for gleaning feedback and insights on customer expectations directly from consumers." Marketers should then apply those insights to help propel loyalty programs forward.

Learning Opportunities

Increasingly, marketers also have an important role in improving customer engagement within a loyalty program, elevating what has traditionally been considered merely "transactional" communications to ensure an overall seamless personal experience.

Loyalty in a Post-Pandemic World

"Our post-pandemic world is shifting people’s values and desires," Lawrence said. "We’ll see a greater focus on ‘time well spent’ and consumer interest in experiencing new things. But we’ll also see demand for greater flexibility from the services and brands we interact with."

He said organizations will need to take this into account when shaping their loyalty schemes and proposition roadmaps, taking care to ensure decisions are based on real-time data and targeted to customers’ present-day demands and needs.

"We can expect to see a continued shift from traditional, transactional, based loyalty schemes towards those that look to drive engagement using tactics like gamification to install a sense of community, plus initiatives that focus on creating emotional connections," he explained. "Both are proven drivers for building CLTV (customer lifetime value)."

There’s also likely to be a big focus on the expansion of schemes — both at the customer level to ensure that families can be part of one centralized membership and at the organization level, where groups that own multiple complementary brands look to consolidate individual schemes into a group-wide offering, according to Lawrence.

"In so doing, they can increase their ability to reward at the same time they learn even more about their individual customers," he said.

Related Article: 9 Ways to Build Customer Loyalty

Taking the Deep Data Dive

Parker said loyalty programs must tap into all the data that companies have on customers.

"With customer habits and preferences constantly changing, what was relevant to individuals an hour ago may no longer be applicable now," she pointed out.

Marketers can understand trends and changing habits through accumulating — and also activating — their data, and evolving their loyalty programs, resources and rewards based on information in real-time.

Another way loyalty programs can stand out in the noise of marketing messaging, said Parker, is by considering each individual's communication preferences: Personalization extends to accommodating consumer preferences and engaging with them on their terms.

"Sending SMS, email or in-app notifications according to customer communication preferences, rather than your brand preferences, can help enhance the relationship and overall loyalty," she said.