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How Loyalty Programs Create Identity to Power Personalization

No matter the product or service, marketers face similar challenges: identifying desirable target audiences and proactively creating authentic and informed interactions that build long-term loyalty. We hear a similar refrain from consumers: “I don’t spend my time or money with brands that don’t get me.” Simply put, brands want to create enduring emotional connections with consumers, which consumers want as well.

We call this relationship the Human Loyalty – where customer expectations are met at various states of needs requiring a proactive approach using personalization to deliver relevance and meaning. This is achieved by using a combination of consumer data and people-based marketing technologies. Human Loyalty solutions are the key to building long-term customer relationships. These solutions create consumer identity and apply people-based technologies that enable personalized moments and messaging. When this type of personalization is done well, marketing becomes more effective, consumer relationships become more enduring, and brands are rewarded with increasing revenue.

Turning Identity into Personalized Moments

When a consumer opts in to a loyalty program and goes from anonymous to known, brands create identity and can begin to move from “one-to-many” to “one-to-one” personalization. However, this is not possible without first-party data and marketing technologies.

Unknown customer to known

With data privacy on everyone’s mind, loyalty solutions provide the permission brands need to collect, access, and use personal data. Acting on transactional data alone will not deliver authentic and meaningful moments. Combining multiple data attributes together paints a clearer picture of what consumers think, feel, see, and do. Loyalty solutions can provide the single source of data that brands need to have a richer consumer understanding, including purchase data, engagement data, contextual data, and self-reported preferences.

However, having the data isn’t enough to create meaningful personalization. You need a people-based MarTech stack to support data management, insights, orchestration, and activation across the brand journey. Human Loyalty solutions provide rich, foundational data sources that fuel the bottom of the tech stack. Combining this data with a full suite of omni-channel decisioning and activation capabilities enables you to effectively deliver personalized messaging based on the need state. At the top of the stack, an evergreen loyalty program gives brands the platform to efficiently activate, test, and optimize messages with a known and receptive audience. Data collected is fed back in to the MarTech foundation so that brands can learn, iterate, and become increasingly one-to-one.

The Technology Data Use Gap

Personalization makes consumers feel that brands “know me and my needs” because personalization strengthens emotional connections.  Savvy brands know personalization is only possible through technology. Over half of clients we surveyed increased investments in loyalty platform technology, data management capabilities, and emerging technologies like artificial intelligence (AI). These investments create the marketing infrastructure needed for one-to-one personalization. Furthermore, 63 percent of clients surveyed said they have fully connected loyalty and CRM data, and over 80 percent have the tools and organizational structure to coordinate and deliver personalized experiences across channels.

Take, for example, self-reported preferences. These are things that consumers explicitly tell the brand they like and don’t like. Yet, only 59 percent of respondents use preferences in personalization.  When you dig down to channel use, just 35-50 percent of respondents use preference data in their digital marketing channels like site, email, and app.

What’s clear is that, even with an infrastructure in place, brands aren’t using the internally generated and immediately actionable data they collect to its maximum marketing potential. This gap between what brands have available and what they use reinforces the consumer sentiment that brands aren’t marketing to them as individuals.

Using Identity to Meet Customer Expectations

Using identity matters for one simple reason: today’s consumers seek authentic and seamless interactions with brands and they expect it across the entire brand experience. Brands need identity and rich consumer data – like that available through a loyalty solution and enabled through marketing technologies – to meet demanding consumer expectations, unlock the ability to provide meaningful one-to-one experiences, and build Human Loyalty with consumers.

Want to learn more? Check out Merkle’s Q4 2019 Customer Engagement Report here.