Upgrading your loyalty program - from generic to personalized

upgrade loyalty from generic to personalized

Marketing

Jul 18, 2022

Sean McTiernan Editorial Content Writer Talon.One

Sean McTiernan

Editorial Content Writer

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6 minutes to read

When it comes to getting the most out of your loyalty program, personalization is the final piece of the puzzle.

"If we have 4.5 million customers, we shouldn't have one store," he says. "We should have 4.5 million stores." - Jeff Bezos, 1998

On average 71% of consumers express some level of frustration when their shopping experience is impersonal. A loyalty program that doesn’t recognize a customer’s interests and behaviors, pushing them towards features and offers they demonstrably don’t care about, can leave them alienated by the loyalty features that initially attracted them.

Loyalty programs are all about rewarding customers for their continued interest in your product. They’re much more likely to be engaged if that interest is reciprocated. Industry leaders like Nike and Amazon have shown what’s possible with personalization but this isn’t always borne out in their retail experience. Any legacy system that can’t adapt and feels too basic risks being left behind.

Services and business models differ from industry to industry but, like shipping or customer service, your loyalty program won’t just be compared to those of direct competitors but every loyalty experience a customer has ever had.

Customer Engagement Is Not A Monolith

Any business soon learns that different customers act differently. Just as the potential for creating ideal customers by rewarding certain behavior, reciprocity on this front is a compelling incentive for consumers too. Loyalty programs improve retention because customers feel they’ve put work into earning rewards, a powerful addition to this is the feeling a loyalty program has learned their habits and is awarding them accordingly.

As previously discussed, the hidden danger of loyalty programs is that a reward for some can almost seem like a punishment for others. By heavily incentivizing customer sign-ups or behaviors where the business is lacking, a company could lose sight of their customers who were loyal before a loyalty program even began. 

Similarly, email marketing is incredibly useful but bombarding a frequent customer with emails not catered to their interest is a sure way for marketing to end up in an unseen folder or blocked as spam. However, if a customer hasn’t visited for a while, a personalized coupon code for a product they purchased frequently or a time-limited offer of earning double points is just the thing to entice them back. 

Personalization: The Cheers Effect

Whenever Norm entered the bar in the sitcom Cheers, he was greeted by a chorus of his own name. These friendly little rituals are emblematic of a local business frequented by regulars, making the customer and the business feel more like family. However, as commerce becomes increasingly online and chains grow globally, customers get less and less chance to feel this kind of familiarity. 

Personalized loyalty creates this feeling of a local business on a global scale. An oft-remarked aspect of Sephora’s much-lauded Beauty Insider loyalty program is the offer of birthday gifts. Purchase history could even be used to make sure the customer gets their perfect gift, just like Norm. This approach doesn’t have to be limited to just birthdays, a solution like Talon.One could easily combine geofencing and date parameters to reward customers during important days on their local calendar. 

Though Sephora’s Beauty Insider program is tiered based on the amount spent, the birthday option is included even at the free tier. Small touches like this make the company feel like a thoughtful friend so no surprise that members of Beauty Insider account for a whopping 80% of Sephora’s business

It doesn’t stop at special dates, the possibilities of personalized loyalty are endless. Loyal customers could have an option to pay in installments for an item they buy regularly. If a customer regularly buys from a particular line of products, likely comparison shopping in the process, a discount could encourage them to stay loyal while also recommending other products bought by a similar customer. Gaining enough trust to run a tab, getting an occasional discount for your usual, and having other patrons chime in about what you should be drinking would be normal somewhere like Cheers. A personalized loyalty program makes this possible at an enterprise scale.

When he comes through the door, Norm’s name wasn’t just shouted by those at the bar. The customers were just as loud. This is another great feature of loyalty programs is that personalization bolsters the best kind of customer community. As we’ve said previously, every loyalty program has the potential to inspire a community. If every customer’s experience is identical, the conversation will quickly turn to how to get the most out of a system. With personalization, each customer’s story is unique and conversation will turn to shared experiences, not tactics. 

Customer Data Benefits Both Sides

Google’s phasing out of third-party cookies, used for collecting data for ad targeting, has lead “44% of marketers predict a need to increase their spending by 5-25% in order to reach the same goals they set in 2021” according to a study by Getapp. Meanwhile, 83% of consumers say they’re OK with data collection as long as brands are using it to personalize their shopping experience.  As this change occurs, getting customers to volunteer information as part of a loyalty campaign will become even more vital.

It’s important to give customers great incentives for sharing their data. EasyJet created a personalized email campaign that delivered a unique travel story tailored specifically to each customer. The email used data points to give relevant travel recommendations based on all of the destinations customers had previously visited while also comparing stats like distance traveled with distances like the length of the Nile and the distance to the moon. This campaign led to an increase of 100% on their usual email open rates and 7.5% of customers who received this email made a booking within 30 days after this encouragement to continue their Easyjet adventure. 

The benefits of collecting customer data don’t stop at marketing alone. Gathering personalized data through a loyalty program creates a compelling and cohesive omnichannel experience. Designer Shoe Warehouse puts their data gathering upfront: asking customers to take a quiz upon signing up to better recommend products they’ll enjoy and sending email newsletters full of personalized data about how much a customer has saved, how much they’ve donated to DSW’s charity program and more. DSW have also put this data to work in their physical locations: customers receive emails asking them to review specific items they’ve bought in-store online, if they buy an item in-store that’s currently in their online cart it’ll get removed. 

Personalized Loyalty On A Global Scale

Talon.One’s Promotion Engine is purpose-built not just to run complex, engaging loyalty programs but to make sure personalization can be applied at every stage of your customer's experience. The rules builder makes it easy to use any available customer data to craft compelling, thoughtful personalization features without any need for developer involvement while also making sure they won’t put any strain on a growing system

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David Hartery

Content Lead at Talon.One

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