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Using Data to Unlock Customer Loyalty

Everyone knows that data is king. As marketers, we’re inundated with it — data from our sales channels, from our digital platforms, our call centers, our CRM systems, and our loyalty programs. This data has never been more valuable. But are we using it correctly? Is this flood of data creating the insight needed to create valuable, personalized experiences for customers and ultimately meet business objectives?

A Data Disconnect

When it comes to loyalty programs, the answer is too often “no.” According to a recent Forrester evaluation of customer loyalty solution providers, marketers recognize the benefit of collecting data from their CRM or loyalty programs, but lack the capacity to interpret and act upon it. The report also identified the top challenge for marketers as personalizing offers, content, and experiences based on behavior — in other words, based on data. This represents a gap between data collected and data used to personalize interactions, with 74 percent of marketers collecting customer preference data but only 45 percent are using it.

This disconnect between what marketers can learn about their customers and the expertise, capability or bandwidth to make that data actionable is a costly gap. But it is a gap that can be bridged by integrating both data and loyalty into a people-based approach to marketing.

The Customer Life Cycle is Always a Loyalty Cycle

People-based marketing incorporates loyalty and data but at its core, it’s about the customer and understating that person’s journey. It’s about anticipating her position in the loyalty cycle and communicating with her where she is and in the right way. It’s also about improving his experience by understanding his needs and delivering relevant, personalized offers, services, and promotions. By combining loyalty and data, people-based marketing augments the traditional trigger-consider-purchase funnel with additional loyalty-driven touchpoints, it and uses data to fuel the most productive interactions at each of those points.

A coordinated approach between data and loyalty, called connected loyalty, can deliver improved customer experiences by relating to customers as individuals, not just as personas or types. In turn, these data-driven experiences lead to longer, more profitable relationships.

The Value of Integration

In practice, connected loyalty can be achieved by integrating existing CRM programs with a strategic loyalty solution. While an existing CRM program may be able to provide deep insight into customer behavior and indeed inform marketing efforts designed to influence that behavior, a comprehensive loyalty solution that incorporates CRM data can expand and improve that capability while also creating customer advocacy. A strong loyalty solution will leverage a CRM data set to determine the most effective offers, tone, and cadence to deliver to customers and provide the loyalty framework to engage, reward, and inspire them.

If both the loyalty solution and a CRM program can access customer data at the same time, it opens the door to marketing possibilities. Offers can be tailored to members of individual loyalty tiers. Direct marketing can include loyalty program status and balances of the individuals it is addressed to. This convergence of data and a loyalty program capability is what powers people-based marketing.

The addressability of marketing and advertising that is facilitated by the integration of CRM data and loyalty is of immense value, not just to marketers but to customers and loyalty members. The pinpoint targeting of addressable marketing allows brands to offer what they know their customers are most likely to purchase, and customers are exposed to the offerings they actually want. It’s a win-win scenario that deepens customer relationships beyond simple loyalty.

Anticipating Behavior to Create Better Experiences

The alternative scenario is as negative as a people-based approach is positive. We’ve all experienced ineffectual marketing from brands that purport to know us — an email that may have your name in the salutation but tries to sell you a product you already own, a display ad that’s familiar enough to seem eerie when it populates in your social media feed, but too generic to register as useful.

Instead, marketing is at its best when it is taking its cues from data and personalizing customer communications in a way that engenders a desire to re-engage. A chief component of that is using data to anticipate customer behavior in order to create better experiences. This involves understanding where a customer is in the purchase and loyalty cycle and using that data coupled with the identifying CRM data to determine the right approach to reach that customer.

Of course, as the Forrester study illuminated, marketers need the tools to execute this approach, and they need the expertise with which to construct a viable action plan to get the most out of those tools.           

Expert Advice, In-House Execution

For many marketers, this means seeking out a loyalty solution provider to support the implementation of their loyalty program, manage their members and reward redemption, and measure the results (more than half of the companies surveyed by Forrester indicated that these were the primary functions they relied upon). Relatively few engage their solutions providers to provide strategy or guidance.

This narrow approach to loyalty can limit marketers’ effectiveness, whereas a more comprehensive loyalty solution can expand it. By integrating loyalty into larger CRM strategies (and reaping the benefits of cross-program data sharing), a comprehensive loyalty solution can more effectively leverage data to drive positive business outcomes.

This is not to say that loyalty and CRM execution can be entirely outsourced; it pays to be close to your loyalty and CRM programs, and by extension your customers. In fact, in-house loyalty teams can rely on technology solutions that make program execution and CRM integration easier, without relinquishing control. By having a partner that can help with data integration and customer strategy development, program planning, implementation and analytics, marketers achieve the right people-based outcomes without distancing their brand from their customers.

Unlocking Loyalty

Data is the key that unlocks loyalty and paves the way toward true people-based marketing. And yet for all the importance we place on data, many marketers continue to be effective at collecting it and less diligent about putting it to good use. Combining data from CRM programs and other sources and integrating it with a loyalty solution can help brands and marketers better define and advance their customers’ journey, while a comprehensive loyalty solutions provider can help bridge that data gap and provide the guidance to take effective action.

Merkle’s 2017 Marketing Imperatives explore in-depth how to activate your people-based marketing strategy through addressable advertising, personalized experiences, and more valuable customer relationships over time. Visit the Imperatives page to download a complimentary copy today.