Why data & loyalty belong together

One of the inherent benefits of loyalty programs is the data and insights marketers can glean about their best customers. Yet, as I talk with clients I often find marketers have the perception that their data strategy and loyalty programs do not belong together, and they are treated as separate marketing entities with unique teams, goals and plans. But data is an integral part of loyalty programs. Data fuels customer identity so loyalty marketers can better understand the behavior of their members, predict future behaviors and as a result drive more loyalty to their brand.

I recently attended the NEMOA event and the value of the data-driven catalog was a central part of the discussion especially around how the catalog can help drive brand loyalty

Let’s explore further how a brand’s data strategy and loyalty program are related.

Catalogs fueled by data insights help to create brand loyalty. Catalogs build the connection with the customer and should be leveraged to reinforce your messaging while creating loyalty to your brand. For example, home furnishings retailer IKEA does a great job of connecting their data catalog strategy with their IKEA Family loyalty program. Members of the program are sent a monthly catalog that features products available for discount to members. The catalog is the ‘first stop’ of the member shopping journey.

Then, to help the consumer decide if he/she should make the purchase, IKEA Family members are able to ‘try out’ furniture in the IKEA app where the experience is enhanced with augmented reality to make it feel real. Following this experience, the consumer is encouraged to either make his/her purchase online or in-store and receives the perks of the loyalty program post-purchase, such as an extended price adjustment period, invites to special events and additional time in SMALAND (IKEA’s child supervised play area – a place for children to go while their parents enjoy a ‘child free’ shopping experience).

Data informs the emotion and loyalty programs personalize it. A marketer’s ultimate goal is to know their customers, and data is essential to achieving this goal. Data insights help loyalty marketers better understand their members and create personalized experiences to foster emotional connections. 80% of consumers are more likely to do business with a company that offers personalized experiences. And, consumers expect an experience that’s going to be valuable and personal. When your data and loyalty teams work together your ability to deliver these experiences grow exponentially.

Data informs our next customer while loyalty creates retention. Analytics is a fundamental component of a marketers’ data strategy. Data modeling and profiling assists marketers in finding ‘look alike’ customers so they can determine who and where their future customers are. And once this new customer is identified, loyalty programs help with customer retention. Timing of message is essential which makes it important for the data and loyalty teams to be in synch.

When your data strategy and loyalty programs are aligned, the focus remains consistent across all marketing constituents to keep the customer front and center in all that you do. Start thinking about the role of data in your loyalty program.