Getting Your Loyalty Program Back On Track
Whether your loyalty program has been in place for years or is recently up and running, you may be noticing unredeemed points, low participation, or inconsistencies in your data. These are some warning signs that your current loyalty program is costing you more than benefiting you.
A simple cost analysis can tell you, frankly, that your program is failing. But why? The answer can be much more complicated. Reasons may include: underestimating high value customers, too narrow of a points redemption period, complicated rules, or too little price differentiation.
But what’s the biggest reason your loyalty program is failing you? Not using your data.
Data is the driver behind a successful loyalty program. Customer insight can wholly benefit your business from informing inventory and pricing decisions to targeting high-value customers for reward opportunities. Not tapping into the wealth of customer data is hurting your loyalty program by discouraging return customers and lowering dollar return.
According to GI Insight, 87% of consumers say that, where a company has a good loyalty program, they have continued purchasing from that brand over the last few years, and 33% have even switched brands because the company they shifted their purchasing to had an appealing loyalty program.
To optimise your program, rewards should be tiered, so that high-value customers are recognised differently than those of less value to your business. To successfully price differentiate, it’s imperative to identify who is participating in your program and what their buying patterns are. Digital customer profiles enable you to keep track of who is in the program and allow you to easily file and store their information.
Once you’ve targeted your key customers, use data to make sensible offerings that are most beneficial to you and the customer. Linking the customer to their purchase history, will let you provide targeted product recommendations with adjusted prices. Go above and beyond by offering personalised products and services or letting your valued customers be able to exclusively customise their reward packages.
Additionally, the data of a smart loyalty program enables you to be more agile with your inventory and your price points. Having the ability to segment your customers provides you with insights that can help you understand what each segment buys, how much they’re willing to spend, and how you can upsell and add on items that they actually want.
Beyond dollars and cents, there’s intrinsic benefit to having a fully functional loyalty program. Leverage the gold mine of data to optimise price differentiation and capture long-term customer relationships.