Loyalty programs incentivize your customers to shop at your stores and advocate for your brand. With so many options available consumers today, more brands are turning to loyalty programs as a way to keep good customers coming back.
Loyalty Programs Work
According to research compiled by AnnexCloud:
- 87% of shoppers reported that they want brands to have loyalty programs
- Over half of the surveyed population reported that, if they like a brand, they will rarely purchase something different. This includes 55% of older millennials, 53% of younger millennials and 51% of Gen Z said the same thing.
- 64 percent of brands reported an increase in loyalty memberships in the past year alone.
- Consumers are retracting loyalty or switching loyalty programs faster than even three years ago, with 78% of consumers reporting they are retracting loyalty at a faster pace.
- 54% of consumers say that they would consider doing more business with a company for loyalty rewards.
- 46% said that they have already increased the amount of business with a company because it offered loyalty rewards.
The most successful loyalty programs should be driven by data. Your most loyal, high-spending customers should be treated to highly personalized experiences dependent on data-driven insights, only available through the massive amounts of data available about consumers today.
So what types of data are marketers using to drive their loyalty program success? In a survey by Merkle, 62% of marketers say their loyalty programs are fully integrated with their CRM data. However, there are big gaps in the data being used for overall marketing efforts and the data being used for loyalty programs. For example, 86% of marketers are using demographics in their marketing efforts but only 39% are using demographics for their loyalty programs.
The types of data that marketers are using the most for their loyalty programs are customer account/history (57%), preference data (46%) and email responses (45%).
Marketers are using a wide variety of loyalty tactics. Seventy percent of respondents use points-based tactics, while 35 percent use surprise-and-delight tactics, which involve unexpectedly rewarding customers with incentives based on certain behaviors.
However, marketers are not necessarily limiting themselves to just one tactic but are rather experimenting with using a combination of tactics. The most heavily used combination is points-based and cash back, used by 12% of survey respondents.
Loyalty Programs Gain New Customer Data
Loyalty programs are also an excellent way to gain new insights into customers – data which can be fed back into CRM systems for richer insights into customer preferences. Respondents to a survey by CMO Council and Cheetah Digital reported that loyalty program participants buy more, buy in greater volume or buy more frequently (43%) than others. Additionally, 34% of respondents said that participants provide more data and information for marketing to leverage in campaigns and programs.
An Acquia study revealed that 75 percent of consumers say that they are more likely to be loyal to a brand when a brand understands them at a personal level. The survey of 5,000 consumers was not restricted to loyalty program members. This means using every data point available about consumers to provide highly personalized experiences, and for loyalty members, these experiences, offers and discounts must be relevant for a customer at the precise moment of interaction cross the customer journey.
Brands may not be fully delivering however. Research by Bond Brand reported that only 25% of loyalty program members were satisfied with the level of personalization in their programs.
Unify Data and Deploy Personalized Journeys with a Customer Data Platform
Knowing your customers at an individualized level means collecting and integrating data about them to create a single version of the customer truth. However, data is often fragmented across many systems and marketing platforms, obscuring customer behavior.
Customer data platforms offer a massive opportunity for marketers to implement a system that collects and integrates numerous data sources with ease and speed. Through a range of system connectors, CDPs are built to continuously collect data from around your ecosystem and consolidate it into a 360 single customer view by merging identities from multiple devices into one, deduping customer records and without the need for significant IT resources. Data, technology and analytics are seamlessly brought together to create right time marketing insights.
Porch Group Media’s Customer Data Platform, Porch Group Media Velocity, also integrates our third-party data catalog to get to know your customers and prospects at an even deeper scale.
According to an Accenture Interactive study, loyalty program members generate up to 18 percent more revenue for retailers than non-members. By incentivizing repeat customers, loyalty programs also increase retention, reducing acquisition costs. A recent Brand Keys study also revealed that a loyalty increase of 7 percent can boost lifetime profits per customer up to 85 percent and a loyalty increase of 3 percent can correlate to a 10 percent cost reduction.
By building a strong loyalty program built on data-driven insights and personalized experiences, brands can ensure they will have loyal customers for life.
Interested in learning more about additional marketing strategies and tactics? Download our Customer Experience Success Kit.
Learn how Porch Group Media can help you get to know your customers better and reach them across channels to boost your marketing success. Contact us to get started!