Frank Minervini is the CMO at Ziff Davis Shopping.
Brands and retailers have long relied on search to increase their visibility and drive customer engagement.
But in an era of ever-changing Google algorithms, diminishing returns for display ads and consumers increasingly turning to social media to discover new products and inform their buying decisions, companies must adapt.
One of the most effective ways they can do this is to focus on cultivating customer loyalty. By leveraging data, they can transform loyalty into a strategic advantage.
The Evolution Of Customer Loyalty
Loyalty has become increasingly valuable from a conversion, customer lifetime value and marketing efficiency perspective:
• The top-performing loyalty programs generate 15% to 25% more revenue annually from brand loyalists.
• Eighty-three percent of consumers say being part of a loyalty program affects their decision to make repeat purchases from a brand.
• Sixty-seven percent of consumers in loyalty programs feel these brands better understand their shopping preferences.
• One in 3 holiday shoppers mentioned loyalty and cash-back rewards would make them spend more.
Loyalty is an extremely powerful motivator for consumers, but most companies aren’t fully harnessing it to propel their business.
When brands try to craft more effective loyalty programs, they often focus on driving personalization at scale, which is prohibitively expensive and difficult to execute. Personalization done right has to be hyper-focused, and it has to be omnichannel to fully optimize for every customer touchpoint.
There also has to be a value exchange to create loyalty. Brands and retailers can use the data already at their disposal—along with next-generation technologies like artificial intelligence (AI)—to deliver rewards and offers that speak directly to consumers’ needs and preferences.
Driving Loyalty: The Unparalleled Value Of Data
To bring true personalization to their loyalty programs, marketers have to unlock the full power of their customer data. Some companies still aren’t doing this: Almost 4 in 10 marketers say their organizations haven’t fully integrated their customer relationship management (CRM) data into their loyalty programs, according to a survey by Merkle, a CRM company.
Brands and retailers have never had access to more data than they do today, but they often grapple with the volume and velocity of their customer data and how to make it all actionable.
Having a customer data platform (CDP) is an indispensable part of making this data actionable. Companies can use a CDP to house CRM, behavioral, social media and third-party data, creating a single source of truth about their customer experience that can fuel a more personalized loyalty experience across their digital channels.
Here are a few other steps to leveraging customer data:
1. Offer members a personalized experience.
One of the most critical phases is designing personalized loyalty rewards and experiences tailored to specific customer segments. Identifying various segment needs can allow retail marketers to identify which levers would be most beneficial for engaging a subset of your audience, rooted specifically in their user journey and stage of brand use.
Brands can leverage this data to create tailored marketing messaging, recommend products and deliver customized offers to reengage the user.
2. Provide omnichannel engagement.
By unifying customer data across multiple channels (e.g., web, mobile, in-store), brands can deliver a consistent experience, regardless of how customers interact with it.
To gain future insights and continue to feed your data warehouse, A/B test offer messaging and reengagement tactics through channels like email, push notifications, member centers and social media. This can allow retail marketers to make quick pivots due to the immediate nature of CDP tracking.
3. Deliver an added value experience to logged-in users.
Digital brands can drive loyalty by giving their logged-in users added value experiences. For example, brands can provide users with early access to new products, special events or members-only discounts.
This also means fostering community and presenting loyalty in a fashion that’s accessible and usable, such as cash-back programs and online wallets. By making it easy not only to build points but also to extract money out of the wallet, brands can create a clear value exchange with customers that engenders loyalty.
Conclusion
Brands and retailers should invest in tools and strategies that help them curate a sense of community, and in turn, repeat business. By maturing their data ecosystem and building out their user personas, companies can bring more personalization to their loyalty programs, diversify their traffic and audience profiles and not live and die by Google search.
When they successfully execute all these tactics, brands and retailers can transform today’s anonymous customers into tomorrow’s steadfast loyalists.
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