Loyalty in the banking sector is typically driven through credit cards. According to a recent Bankrate study, there are approximately 2 billion credit card holders in the USA alone, and each person carries four credit cards on average. Additionally, the rise of fintech start-ups is threatening the share of wallet for even the largest of banks. The competition is real and intense! To differentiate themselves, banks need to center their offering on core customer needs and evaluate their loyalty strategy to draw synergies from these emerging start-ups.
As CPGs continue to navigate the direct-to-consumer landscape and finding ways to improve their customer experience and campaigns, loyalty continues to be the primary tactic to enable personalization, increased engagement and customer growth.
Successful brands use data to direct business strategy, optimise customer journeys and craft relevant content to build long-term relationships. The beauty of loyalty is it’s the most influential mechanism for capturing customer data while operating within data privacy regulations because the fundamental principle of loyalty is a customer willingly volunteers their data in exchange for benefits. As they opt-in to the terms of the program, marketers can serve up offers and content that helps emotionally bond the customer to the brand. However, many brands are struggling to pull insights from their data from which to build the strategy and campaigns to make their data come to life for them.
To start their data and insights strategy, marketers should consider their primary goals, likely personalisation, comprehensive view of customer, customer growth, churn reduction, etc., from which to establish KPIs that align with business needs. These KPIs go beyond loyalty program mechanics and metrics to affect all business units, from operations carrying out customer experience to merchandising determining the products to feature to marketing as a whole in making acquisition more cost-effective.
The point to remember is that the goal of both technology and strategies is to make data useful. This may require that some data is pared away or left unused. As such, the platforms and strategies that brands choose to adopt should focus on structuring data into unified, accessible views that will enable the team to design successful strategies.
Every brand is working to deliver personalization as effectively as they can, and with good reason. Personalization can reduce acquisition costs by as much as 50%, lift revenue by 5% to 15%, and increase the efficiency of marketing spend by 10% to 30%. However, according to Ascend2, 63% of marketers list personalization as one of their top challenges. Numbers like these, and cautionary tales told by experts like Gartner that “marketers must tread light in their personalization efforts to appease both consumers and regulators” make personalization seem much more difficult than it is. In fact, a key to easy personalization is loyalty, simply due to the fundamentals of the data exchange inherent in loyalty initiatives.
Make no mistake here – we’re not suggesting brands do away with points or get rid of currency entirely. You can make your program look like whatever you want it to. What we’re suggestion is thinking outside of points in terms of structuring your loyalty program. Many brands hesitate to implement a traditional program because of the liability that may be associated with points. This requires marketers to gain additional buy-in and expertise from their financial and legal teams. Or, some brands see points-based loyalty as another deep discount mechanism that lacks differentiation from one business to the next.
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Want to personalize? 63% of marketers are struggling with data-driven personalization.
Want to solve for the huge churn from one transaction to the second and third transaction? Increasing retention by 5% can yield 25% to 95% increase in profits.
Want to create a shared, single view of customers across all business units?
As leading QSRs look to stay competitive, it’s time to do more with data. For too long, restaurants have used punch cards – first physical then moving into the digital realm with mobile campaigns – to reward loyal customers. While punch cards are a great engagement and repeat purchase tactic, they don’t collect the most important customer data. Your competition is beginning to invest in next gen retention strategies and technology to collect customer data to deliver personalized experiences across each customers’ journey. Once you have critical customer data in hand, you can look across verticals and adopt the tactics other brands are using to increase engagement and retention.
For top brands that have found their hook as customer habits - think Amazon when you need anything quickly, Nike when you want to improve fitness, Walgreens when you want overall health - becoming a habitual part of a customer's lifestyle means bringing in revenue and building continuous growth.
What happens when a "trend" becomes a "must-have"? Personalisation has been a buzzword in the loyalty marketing realm for the past couple of years, yet it's no longer something that is a nice to have; in the age of the empowered customer, brands need to better serve customers an individualised experience.