5 New Strategies in Loyalty Marketing
2. Get Value Out of Your Data
“The idea is, if you can understand customers a little better, you can put them in buckets. Those buckets may be how valuable they are to you or how much potential value they have,” shares Ferguson. “Then you start to give them offers based on their past behavior.”
Ferguson provides the example of a grocer that’s operating a grocery loyalty program. After pulling out all the customers who bought diapers for the first time in the past 12 months, it could send them offers based around that lifestyle change, such as for formula or more diapers. “That’s what’s going to transform loyalty marketing over the next five years or so; you’re going to see retailers in particular get much, much more sophisticated in how they use the data that’s coming into a loyalty program,” shares Ferguson.
3. Start the ‘Relationship Chain’
In a well-run loyalty program, you get smarter over time. “We call it the relationship chain, which basically posits that each interaction with the customer moves them a little further along the chain towards having a deeper relationship with you,” explains Ferguson. The first link is acquisition of that customer; next is identification, in which marketers really understand who the customer is. “This link was always a challenge for retailers because customers would walk into the store and pay with cash or checks and the retailer would have no idea who the customer was,” he says.
Loyalty programs solved that problem by providing an identifier, such as a membership card, so that the retailer can now pay attention to what the customer is doing. Whether a customer is opening an e-mail from the company, calling a customer service line, or going online and checking his or her points balance, each interaction is now getting tracked and telling the company a little more about that customer.