Why launching — or revamping — a customer loyalty program should be a top priority for retailers in 2018

Customer loyalty programs have been around in some form or another for decades. But in today’s world, where people are flitting between online and physical stores and chasing the best deal possible, brands are constantly competing for consumer attention, in addition to brand loyalty.

Creating a customer loyalty program that is useful to both the customer and the company can be a massive challenge — in fact, 70 percent of consumers surveyed by 3Cinteractive for its “2017 Mobile Marketing Planning Guide” said they won’t sign up for a company’s program if the onboarding process is too complicated.

A loyalty program’s success requires a strategy that infuses the customer experience and branding expertise with the right technology and design. As the confines of marketing continue to expand and the lines between IT and marketing continue to blur, this daunting task will fall on the shoulders of the CMO and marketing department.

To fully understand how to implement a best-in-class loyalty program, it can be useful to take a closer look at some of the profits that come along with such programs.

Here is a brief overview of three of the biggest marketing-related benefits that can be reaped from a well-designed, well-maintained loyalty program.

1. Collecting valuable data – and using it to get personal

As many marketers already know, data is becoming increasingly invaluable, especially when it comes to getting to know your customers on an individual and personal level.

A customer loyalty program creates numerous opportunities to collect such data, reaching customers at various touch points throughout their purchasing journey and, in some cases, beyond the moment of purchase.

In fact, loyalty programs allow marketers to collect data on two levels — primary and third-party. Marrying the information collected from each data set will eventually allow marketers to create campaigns and products that are targeted to each individual customer.

To do this, marketers use primary data collected from their loyalty program’s apps, websites and more to better understand the individual’s purchasing behavior, locale and other personal information that they provide.

They can also track what marketing campaigns and channels the individual interacts with the most to determine what tactics are resonating best. Marketers can then use third-party data to create “look-alike” models that they tweak with fresh data insights.

These data-mining capabilities will only improve as machine learning and artificial intelligence solutions become more advanced.

2. Creating a seamless brand experience for customers

Using the insights collected via customer loyalty program platforms, retailers can better architect a more seamless, omnichannel brand experience. Many retailers have already been successful in using various loyalty program platforms to merge their digital and physical presences, which can help eliminate customer pain points and problems.

For example, Starbucks’s loyalty program features an app that allows customers to order online and pick up their beverage in store — completely bypassing the notoriously long lines! Similarly, Walgreens’s app allows customers to refill prescriptions with the touch of a button, as well as set pill-reminder alarms, order photo prints and much more.

By offering perks and time-saving “tricks,” marketers incentivize customers to continue to use their loyalty program tools, thus ensuring that they are able to collect new data and tweak their efforts accordingly to perfect the experience.

3. Leveraging inbound AND outbound marketing techniques

While outbound marketing has been a mainstay since the creation of the marketing industry itself, inbound marketing is becoming increasingly vital to marketing strategies, as it allows marketers to create pathways that let users discover the brand organically.

With inbound marketing, the trick is to create content that attracts customers to the brand’s identity, values and personality. A gold standard example of this is Coca-Cola’s 2011 “Share a Coke” campaign. To reach Australian youth who were not drinking Coca-Cola, the company collected data on the top 150 most popular names in Australia and printed these names on bottles and cans. This simple idea got Australians rushing to buy Coca-Cola products with their name on it!

Coca-Cola eventually rolled out this campaign in 80 more countries, using social media to maintain the buzz by allowing customers to vote on new names to add. The company even set up kiosks where customers could design custom bottles.

The success of any customer loyalty program depends on the marketing department’s ability to gather relevant data and create a personalized experience. This requires the company’s CMO and IT department to work closely together to collect and analyze this data quickly.

Most importantly, CMOs and marketers must realize that the development of the “perfect” customer loyalty program is an ongoing, collaborative process.

Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.

About The Author

Rohit Gupta

Rohit Gupta leads the North America consumer and media digital strategy practice within Wipro Digital. Prior to Wipro Digital, he has held various leadership positions within the retail industry driving digital transformations through customer centric solutions for eCommerce and in-store experiences. He holds an MBA from Cornell and mentors various start-ups within the Bay Area.