Traditionally loyalty efforts provide a rich set of data on a member’s transactions. Transactional data is a great start, although it only informs us of what a member is currently buying from us. Transaction data rarely provides insight on what else the member could be buying, the reasons behind their purchase or what differentiates this customer from others.
Trying to learn from transactions alone is like receiving a gift without knowing why or who gave it to us. We want to thank the person for the gift and let them know how much it’s appreciated. We want to know more about the giver so we can give them something in return. The more we know about them, the more value we will provide in future interactions with them. And the more we know about each customer, the easier it becomes to understand what differentiates this customer from the rest.
Seeking and applying data in loyalty has similar characteristics. Marketers want to understand who gave the gift, which in this case is a purchase. A basic tenet of loyalty marketing is identifying and gaining information on the customer. Doing so allows marketers to learn more about them in order to make each interaction more relevant and valuable.
Marketers start with the purchase data. Leveraging the data in a customer’s purchase file helps identify what type of goods or services the customer is interested in. Good loyalty marketers engage members to gain information about their interests, hobbies, lifestyle and lifestage, as well as when and how they prefer to be contacted. Marketers often refer to this type of information as self-reported profile and preference information.
Customers respond well when asked to complete a profile and indicate their preferences, especially if they perceive value from the effort. To demonstrate value, smart marketers begin the process with a few key questions. These key survey questions should have a predefined plan for an immediate response. For instance, for a question about interests, marketing responses should be ready to reply with information on specific products or services that align with each interest identified by the customer. The faster the response, the stronger the linkage made between providing the information and the value gained by the customer. Too often, surveys are conducted or preferences are captured and nothing happens. The same marketing campaigns and message cadence continues. Customers become wary. When this happens, to get the sharing started, an incentive may be required to prime the process.
Again, the key is to demonstrate the use of the information the customer provide and how it will improve their experience with your brand. If customers indicate their interests are sports or cooking, then they will expect to be provided offers, benefits or award options aligned with these interests. The more a marketer can demonstrate the use of the information they’re asking for, the more willing the customer is to share.
When people give us gifts, we want to be able to give them a gift in return, so we set out to learn more about the giver. We talk to their friends or others that know them. For loyalty marketers, the “friends” are other brands or organizations that also interact with the member. There are numerous sources for this third party data.
There are data providers that can provide demographic, psychographic and socioeconomic information. Typically these providers need a name and physical address, or sometimes just an email address, to match to customer records in their system. Once a match is made, customer information is provided based on the needs of the marketer to help fill gaps in the member’s file.
Marketers can also gain information by reaching out to their partners or other companies who also serve loyalty members for promotion or co-marketing opportunities. This is commonly done in cooperative marketing campaigns between companies having the same target customers, but offer different products or services.
For instance, a European hotel chain may want to partner with an airline to target international travelers. Such partnerships allow the hotel chain to offer more appropriate rewards and marketing collateral that reflects their loyalty members’ interests while enriching both its own and the airlines’ data repositories.
Care should be taken in how the sharing is conducted because of privacy concerns and privacy policies. Does your organization’s privacy policy cover sharing customer information with third parties? If it doesn’t, your cooperative marketing efforts may be limited to making offers to your customers on behalf of a partner. In this case, you identify who might be interested in the partner’s products and make the offer in a communication you send to you customers. Even if you have a privacy policy that allows data sharing, only share the information needed to accomplish the marketing program. You may provide a name and address list of customers that match a given profile to a partner with a clear understanding of how the list will be used, the number of times the list can be used and for what purpose. To monitor the practice of your partner, include some ‘seed’ names in the list so you can monitor the list usage.
Lastly, when a marketer knows a customer, it wants to become part of the customer’s social circle and be in touch with them on a regular basis. So the marketer connects with them on social networks. Social networks are rapidly becoming an information source for today’s customers. Across their network, they share what they like and don’t like, how they use a product or even how a product or service has failed them. Customers learn through their networks. If you can add to the learning, you simultaneously provide and gain value.
Marketers can also use social media to invite feedback. Inviting feedback from loyalty members allows a marketer to capture new data while engaging them. Marketers can ask program participants for reviews of recent purchases, opinions of the locations they visited or for suggestions for future promotions. Feedback also helps marketers shape the conversations taking place about your brand.
Today data is ubiquitous. Many interactions with marketers’ brands occur online. These interactions reveal data points and preferences that can help the marketer enrich the customer experience. Data collected through social media can help identify key topics or keyword that can be used in your marketing communications. Monitoring online conversations can also improve customer service. Social media has offered new information options through profiles, interests and activity of their subscribers.
Loyalty is about building relationships. Information, or data, is at the center of the personal relationships we form every day. We interact with people because we want to know more about them, find areas of common interest and how we can help each other enjoy the lives we live. As marketers we need to focus not just on collecting data. We need to constantly work to use data to inform and improve the relationship between our brand and customers.
As human beings, we’re naturally wired to accomplish this task and often take for granted the information we collect and how it is used by our brains to guide our interactions. Take time to think about how you build relationships in everyday life and apply your innate ability to marketing strategies and tactics. Along the way, remember the trust that is part of the best relationships.
Be respectful of the information you collect, how you collect it and most importantly, how you use it. For any information you collect that doesn’t come directly from the customer or interaction between your brand and the customer, use the information to enhance your marketing message and be careful about building a message solely on third party information.
Again, think about your everyday life. If a stranger were to begin a conversation with you with a piece of personal information, are you skeptical or uneasy? Now, if the conversation begins with an introduction and conversation, that same person could bring the same personal information up and you probably wouldn’t be as concerned. An even better situation would be if the person posed a question around the personal information, thus giving you the opportunity to provide the information yourself. This is a good tactic as it does two things: first, it poses the third party information in a non-threatening way. Second, it allows you to confirm the accuracy of the information.
By using the information collected to create mutual value for a loyalty marketer and its members, loyalty programs become the gift that keeps on giving.
