In an industry as competitive as retail, it's critical for brands to provide a differentiated and personalized experience to demonstrate the unique value they bring their customers.
By Bobby Spence, VP, Sales and Business Development, Excentus
In an industry as competitive as retail, it’s critical for brands to provide a differentiated and personalized experience to demonstrate the unique value they bring their customers. And as today’s consumers demand more from the brands they do business with, the retailers who are most successful will be those who leverage customer data into their marketing strategy. One of the best ways to do this is through a loyalty program that offers the ability to earn appealing rewards and provides a customer experience unique to the retailer’s brand.
For consumers, a good customer experience must be personalized and of value. Loyalty programs can help create that kind of experience, both through their ability to deliver value through rewards, and through their ability to capture behavioral and attitudinal customer data. This information helps retailers to better understand what consumers need and value from brands, which allows the brands to deliver experiences that set them apart from their competition.
Better experiences demand better loyalty approaches
Simple points-accrual loyalty schemes won’t achieve these goals. The industry has evolved beyond simple spend-and-get loyalty programs that don’t capture the attention of consumers, nor deliver results for retailers. In today’s marketplace, consumers expect brands to understand their needs, communicate only relevant information, interact with them as if they’re a close friend and offer the most meaningful, relevant rewards.
In addition to capturing customer data, retailers need to use it in the right way. This means leveraging loyalty and other customer data to inform customer segmentation, offer management and personalized content that allows consistent delivery through all touchpoints — in-store, online, email, call center, print and via their mobile app. The next step requires retailers to integrate the learnings from the loyalty program into their overall marketing strategy by building buyer personas, lookalike modeling and offer management based on known customer data.
Building trust through understanding
Consumers have entrusted brands with a great deal of information and are increasingly allowing brands they trust to track their behaviors and connect to their social accounts. As a result, it’s critical for brands to demonstrate they understand customer preferences by providing a meaningful experience before, during and after the transaction. The one-size-fits-all approach of blasting mass emails containing undifferentiated offers is outdated and inefficient. Customers who have shared information rightfully expect a higher level of personalization.
The onus doesn’t need to rest entirely on the brand’s shoulders. Brands should establish a dialogue with customers that facilitates co-creation of personas and preference profiles. This process drives interaction, builds trust, deepens relationships and opens a channel for ongoing communications. This style of interactive persona development not only informs the brand about the “who,” but gives brands insights as to the “why” customers do what they do or want what they want. It creates the foundation for brands to deliver unique, bonding and profitable customer experiences every time and through every touch point.
The right rewards get results
Obtaining a deeper understanding of customers is only part of the process to creating a winning customer experience. Providing them with relevant currency and valued rewards is what completes the appeal. Consumers like redemption options, but there is one reward they prefer more than others.
According to the 2017 Road to Rewards report, fuel savings is the No.1 most preferred reward in loyalty programs. Thirty nine percent of consumers surveyed cited fuel savings as their reward of choice, with cash back coming in at 35 percent. Accruing rewards is a motivator for consumers that is driven by both the dollar value of the reward as well as the nature of the reward — some rewards are simply perceived as more valuable than others, and are therefore more effective at influencing consumer behavior. And for the third consecutive year, nothing motivates consumers to take action more than fuel savings.
The numbers shared in the report bear this out — loyalty programs featuring fuel rewards have seen a steady climb in membership, rising 10 percent over the past two years. Furthermore, 64 percent of survey respondents indicated that they belong to a program that provide options to save on the cost of gas, up from 59 percent in 2016 and 54 percent in 2015.
One of the reasons cents-per-gallon discounts resonate so well with consumers (and are so effective as a rewards currency for retailers) is that filling the tank is a once-weekly occurrence, on average. Very few retailers see their customers every week, but with fuel savings as a central component of a loyalty strategy, brands are able to be top-of-mind for their customers every seven days or so.
The right rewards mix is a primary catalyst to program membership acquisition, as well as ongoing engagement. Retailers who are thinking of offering only coupons for a percentage/dollar off the next transaction should consider incorporating fuel savings as a currency, because it can be just as effective (if not more effective) at driving the next shopping trip.
Retailers looking to drive repeat traffic also need to consider the fact that 36 percent of consumers state that they shop more frequently at stores where they can earn rewards on fuel, up 10 percent from 2016. As a retailer, how great would it be to see a lift in traffic and overall customer spend from 36 percent of your customer base?
Unique and consistent customer experiences throughout all touch points, along with fuel savings as a rewards option, provide retailers with the ability to provide meaningful offers to their customers, increase brand affinity and drive higher revenues for their businesses. Consumers have routinely demonstrated their willingness to share information, it’s now up to the brands to use the information to develop deeper relationships that result in benefits for both the consumer and for the brand.