Data Drives Loyalty (If You Know How to Use It)Once upon a time, customer data was a commodity. Today, it’s a highly-valuable currency driving business forward. As an influx of data pours in from e-commerce, POS and payment processors, mobile devices and social media outlets, brands now have access to a gold mine of customer intelligence. Unfortunately, this Big Data surge has many leading brands losing sleep over how to streamline, analyze, and ultimately, leverage an overwhelming amount of data points from multiple channels.

Fortunately, data can be smart without being big. One simply needs to understand how to harness it into actionable business intelligence and apply it towards improving long-term loyalty and overall profitability.

The biggest challenge is dealing with the amount of consumer information and putting the data to work in a way that increases consumer engagement and drives sustainable business results.

President & CEONew Balance Inc.

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Data Rich, Insights PoorIn the past year, two-thirds of retailers have increased the amount of information captured and stored on individual customers. This accumulation of data covers everything from shopping behaviors, average basket size and visit frequency to loyalty program and social media engagement. Regrettably, when it comes to analyzing data, only 36 percent of retailers believe their organization has a well-defined policy in place for extracting and evaluating the most valuable information.

Herein lies the major barrier for retailers who are data rich and insights poor. Without knowing how to transform data into customer insights, retailers are essentially paralyzed. The ability to strategically drive a more personalized customer experience, influence buying behaviors and perhaps most importantly, recognize why a customer’s loyalty has diminished, comes to a complete stand still.

Tools to Decode Your Data

Sophisticated loyalty software solutions with built-in reporting and analytics allow marketers to quickly evaluate data and derive advanced customer insights to improve loyalty programs.

To avoid undermining your customer’s loyalty, utilize these three proven industry best practices to put your data to work:

1, Identify Shopping Behaviors. Data will offer clarity and transform a list of faceless loyalty members into meaningful insights. The first step is to chip away at the data to identify individual shopping behaviors such as the customer’s preferred store location and average weekly spend. Additional behaviors such a product preferences (brands versus private label), price sensitivity, website activity and coupon redemption will help generate a clear picture of how loyalty members shop and engage with your brand. In the end, the compiled data will bring clarity to “Jane Smith customer” and reveal that she is a price-sensitive shopper who utilizes coupons at the Main Street store twice a week to purchase private label beauty products.

2. Build Customer Segmentations. With a better understanding of shopping behaviors, customers should be segmented to generate further insights that will fuel smarter business decisions. Segmentation is limitless and can be overwhelming. While there are multiple strategies, best of breed companies identify, classify and group customers as gold, silver, bronze and elapsed to create targeted promotions and relevant messages to each segment. Segmenting loyalty members is an effective strategy to ensure marketing dollars are allocated effectively and meaningful rewards are offered to the appropriate customers.

SWEET TIP: Working backwards (defining business goals that can then be developed into promotional offers) will help identify segmentation schemes that make the most sense for your organization.

Put Your Data to WorkKeeping customers loyal is not an easy task, therefore relying on guesswork to manage which products should be de-shelved or receive double bonus points can haunt brands and wreak havoc on profits. As brands attempt to consolidate and make sense of incoming intelligence, consumers have become less forgiving of brands that make so-called personalized approaches through poorly-targeted marketing campaigns.

3. Leverage Data for Business Solutions. With your data now organized and sorted, the needs of your loyal customers can become a strategic priority for your brand. Business decisions related to product assortment, services and bonus points issuance should be fully evaluated to ensure the needs of your loyal customers are satisfied first. The data will likely reveal insights of clarity that will lead to more profitable outcomes. As an example, you may discover that a poor selling product on the verge of being delisted turns out to be a high-selling item among loyal customers. A new product strategy involving pricing, merchandising and marketing can be developed to capitalize on the newfound insights.

4. Customer Data Is a Real Game Changer. News flash: the real value of a loyalty program resides in the data. More loyalty members means more data for brands to improve insights and strengthen strategies. Customer data is a real game changer - if it is utilized to refine targeted messages, segment consumer groups, create personalized communications and fine-tune promotions to generate loyalty. Robust data will also help marketers enhance customer experience and lift engagement by understanding and acknowledging preferences over the course of the relationship.

Loyalty consultants serve as a valuable resource for customized advice regarding segmentation schemes, analysis methodology and manipulating data to drive larger profit margins.

SWEET TIP: Use data metrics to drive a more personalized experience for Jane Smith, attend to her specific needs and influence loyalty.

SWEET TIP: A shift in rationale can easily be justified to vendors, the marketing team and senior management using fact-based business intelligence.

5 Signs You Know How to Leverage Loyalty Data:

about DataCandyDataCandy (formerly FANBOX) is a North American leader in loyalty and gift card software solutions for the retail and hospitality sectors. Since its inception in 2002, DataCandy has led the way in providing customer engagement solutions to more than 2,000 locations across Canada and the United States. The company’s technology platform has achieved global demand for its ability to obtain the real-time and product level data needed to generate targeted promotions towards loyalty program members. The DataCandy platform is simple interface, scalable for growth, secure for financial transactions and provides omni-channel capabilities.

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A well-defined policy is in place for analyzing valuable information

Valuable customer insights are obtained on a consistent basis

Promotions are personalized, relevant and targeted by segment

Managing pricing and product assortment strategies is not a major headache

Sales are being expanded by cross-selling logical products

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Source: The Wise Marketer • Loyalty360 Brand Bites