How Customer Loyalty Schemes can drive Customer Insight

The reason many companies create a Customer loyalty scheme is obvious: to increase customer loyalty.

If the scheme is not well thought through, it risks simply reducing margin by discounting activity that the customer is naturally exhibiting. A well-designed scheme however, will not only effectively engender loyalty, but also benefit the business in a myriad other ways, courtesy of the data that is being collected.

Data can drive the contact strategy

The first benefit of the data collected through the scheme will be to the scheme itself. By studying and modelling your customers transactions you will be able to provide a highly personalised experience to them. Creative can be visually appealing, featuring favourite products and relevant offers. Tone of voice in messaging can be engaging, by ensuring it is relevant to the customers’ specific segment e.g. students vs families vs young couples, etc.

By ensuring that all of the messaging - from timing to channel to content - is as relevant and targeted as possible, we can maximise customer engagement and response to promotions. The biggest failure of most marketing communications is that customers simply don’t open or even see them, as they become accustomed to the predictability of the activity.

Providing an engaging and personalised experience will ensure your message is getting through. The next challenge is how to translate this into loyalty, rather than just providing discounts – but that is a different topic!

How can loyalty scheme data benefit the wider business?

The less frequently realised benefit to a loyalty scheme is the insight that the business as a whole can extract from the data, and the actions it can drive.

In the current commercial climate, data is king; driving decision making across all aspects of the most successful businesses. Loyalty schemes can collect data from all segments of customers, from the most engaged through to less frequent and lapsed. As new customers are acquired, this can help us predict their future value and segment.

Helping understand customer behaviour

Many retail businesses will only really collect anonymous transactional data through the tills in store. Those businesses who also sell through websites may collect customer data via the online channel, but also it can be difficult to unify the online and offline worlds.

A loyalty scheme allows businesses to collect data on their customers across both online and offline for a complete picture of that individual. If the business does not yet have a Single Customer View, this can be an important development in order to provide a holistic view of their customers behaviour.

For businesses which are primarily offline, loyalty scheme data can provide accurate metrics for customer demographics and profiling, transaction frequency, breadth of products purchased, visits across multiple locations, preferred times of day or week and many more! Often it will be the first time these businesses will be able to accurately measure these factors at a customer level.

For example, a food retailer my understand which 2 breakfast products go well together, but would need a view of the customer as a whole to understand how that transaction correlates to lunchtime behaviour.

The insight this data can bring can be utilised across the business, with not just the marketing department benefitting. In many instances the data will be used by a number of departments from product, property planning, right through to finance.

At Data HQ we are highly experienced in helping our clients get the most from their data. Our award-winning work with Greggs shows how Customer Loyalty data can be utilised to drive business wide benefits.