DATA. Somehow we keep coming back to this term. And no wonder – data is all around us, and it's often more important than it might seem at first glance.
Take z.B. Customer loyalty – for this, data plays a crucial role. A repeat customer reflects the most important segment in your customer base – high engagement, high-spending, buys often, etc. So it's only logical that you want to know as much as you can about this customer (and in all likelihood, the customer will give you everything you need to do so).
So why do so many companies struggle to develop and deliver a personalized customer experience for loyal customers?? And what would such a data-driven and personalized loyalty program actually look like??
Create a data-driven loyalty experience for your customers
It's not particularly difficult to set up a loyalty program, incl. To create and set up an associated app. But that makes it all the more difficult to do all of this in line with your customer data to provide a seamless customer experience. But it's precisely this dynamic that is needed to ensure long-term personalized experiences and ideally target your most loyal customer segments.
Innovative brands around the world are already using data management platforms to create an omnichannel experience for their customers. Below, we highlight 5 loyalty programs that use customer data to optimize the personalized experience for your customers.
5 examples of successful loyalty programs
For each example, we provide helpful tips on how to achieve similar successes.
1. REI member dividend REI co-op
REI doesn't work with a mainstream loyalty program – instead, the company offers a lifetime membership that pays off. A $20 sign-up fee gets subscribers an instant 20% discount, in-store garage sales, and invitations to exclusive events, as well as a member dividend of 10% on all eligible purchases, paid 1x a year.
Although the loyalty program is not free, the relatively small investment pays off immensely for the customer in the long run. Let's say within a year you buy running shoes for $100, then a winter outfit for $500, and trekking or hiking gear for $400. That then makes a full $100 in cash back that you can receive in cash, check or coupon for future purchases.
The "REI member dividend" is a good example because REI co-op members receive your share of the company's profits every march. The two-tiered reward program offers first, a small percentage of company sales, plus rewards for all purchases made with REI's mastercard (which also offers other benefits to the customer).
With the help of these programs, and the accompanying app, the company is able to collect enormous amounts of meaningful data to learn even more about its own customers. Most customers use their membership ID every single time they make a purchase, which in turn provides REI with a lot of information. The company additionally collects data online, offline, and via its own mobile app. This captures location data of devices used, web behaviors, personal preferences, key financial and demographic data, and sometimes even information about each customer's fitness and physical characteristics. All of this data helps REI better understand its own customers and improve communications with them over the long term. Additionally, members have the opportunity to receive other perks and benefits through certain interactions:
- A $100 gift card as early as mastercard enrollment
- User-specific discounts for subscribers
- Special offers tailored to the specific member and the interaction between the customer and the brand
However, customers always retain a great deal of control over what data they want to share and what they don't want to share. And REI isn't just about sales; instead, the company aims to foster a positive brand experience – through special events and even boardroom voice opportunities. You could almost say that for REI, customer loyalty is a true way-of-life.
2. Starbucks rewards
The world's most recognized coffee brand has one of the best (and most widely used) rewards programs. This puts starbucks at the forefront of the U.S. Foodservice industry, with more than 14 million customers. Active users (US) in the app. The program is not only free and easy to use, it also covers various aspects of starbucks' business model. Starbucks' app-enabled rewards program allows customers to earn points with every coffee purchased at a starbucks location. Consumers can also earn points by purchasing starbucks products in supermarkets, online, or in the mobile app, as well as by completing certain bonus tasks (star dashes).
The starbucks rewards™ initiative gives the brand's biggest followers and fans the opportunity to earn rewards via specific promotions and activities; z.B.
- Purchases that eventually lead to free drinks and food items
- Birthday gifts / rewards
- Pay-ahead options
- Exclusive events and offers for members
- An even more "personalized" experience for gold members
With the app, customers earn 2 stars for every U.S. Dollar spent. Once the customer reaches 125 stars, they can have a reward paid out for them. Emails sent are personalized with appropriate order suggestions based on purchase history and completed with "order-ahead" options for app members.
This ecosystem, which starbucks has successfully built, spans store, mobile app, and online – leveraging key information such as purchase, location, device used, ibeacons, financial & demographic information to ultimately deliver the best customer experience. Similar to our first example, REI, the loyalty program offers members exclusive events and discount promotions. Members also receive free refills at starbucks stores…As well as the ability to pre-order items and drinks (my mom's favorite perk).
3. Meijer's mperks
Mperks, meijer's customer loyalty program, gives customers the opportunity to use coupons and vouchers without having to cut them out, print them out, or even present them at a store. The company encourages customers at the point of purchase (POS) to participate in the mperks program and earn rewards with each purchase made. At the same time, meijer's is so diligent about collecting all relevant information about its customers – both online and in-store.
Meijer's mperks loyalty program comes into play primarily during the checkout process. And although the basic benefits come into play at each POS, the company successfully demonstrates that it knows its customers – through personalized communications and incentives to visit each retail store. But how can it be that the brand knows so much about its own customers?
Meijer collects information about previous purchases, devices, online browsing habits, demographic and financial information, as well as information provided by third parties. Members get a 2% rebate on selected products, get discounts on repeat purchases of medications, and get access to exclusive offers and promotions. Customers also receive digital "checkout slips" that make it less complicated to keep track of them, as well as a custom digital credit card – which shows progress toward a reward – and takes up no space in the customer's wallet.
4. American airlines' aadvantage
The airline industry is one where attention to detail is EVERYTHING – logistics, maintenance(s) and preparations, travel diaries and flight plans…Everything must be perfect. Airlines also need to show their loyal customers that they know who they are. Personalized messaging – keeping passengers informed and up to date on important details can't be appreciated enough.
American airlines' rewards program – "aadvantage" – shows frequent flyers exactly where they are on the path to gold membership, as well as how many award miles they have left, and what interesting information is available about the travel destination.
The program continuously leverages customer data to ensure that information is at the center of all communications with loyalty members. It's also a true "best-in-class" example of a company that has truly put the customer at the center of its own operations.
5. Lancôme's elite rewards
Lancôme provides a nice use case for our article. Let's say there are a certain number of customers who have made a few purchases at one of your stores at a certain point in time. These customers could have become regulars, but for some reason they stopped buying your products a few months ago.
According to accenture, 80% of customers who have left a store say that there was something the company could have done to make them stay. Lancôme is trying to do just that, with an attractive offer of 100 loyalty points (the equivalent of approx. $10) and the opportunity to tell lancôme why customers wanted to leave and what might have enticed them to stay.
Once customers fill out the form within the email sent, you receive a coupon code that you can use for the promised loyalty points.
Why loyalty programs fail?
Customer loyalty is the end result – the desired behavior. The desired attitude on the customer side – which is preceded by a lot of work and planning on the company side. It is the quintessence of what your company is trying to achieve with many steps; among others by:
- Providing a seamless customer experience
- Interesting, regular and personalized content
- Optimal arrangement of all your resources + centralization of all your customer data
- Effective training of your customer service team
- Monitoring each customer, resp. Of the respective lifecycle stages
Your loyal, high-buying, long-time customers are the lifeblood of your business! This segment makes up your "VIP members" or your "rewards club. But if these customers are so important and valuable, why do 77% of loyalty programs fail within the first two years (capgemini consulting)??
Many companies only award points when a purchase has taken place – deliberately reducing the frequency with which customers can earn points and earn perks. But in many loyalty programs, there are other aspects that are not right – in addition to the purely transactional nature of the programs themselves. Many companies do not use the complete data they have on individual customers (or even worse: they do not have all relevant data on their customers).
And let's face it, a good loyalty program should value and reward a whole range of activities that a customer can do for that particular company – such as.B. A follow on a social media account, encourage friends to make purchases, watch videos, subscribe to other rewards programs or email lists, etc. Best example: marvel's insider program rewards fans for following on in-house social media channels, inviting friends, or watching the latest product videos. And this model is not very different from other loyalty programs.
Still, many companies continue to struggle with their loyalty programs…Something is missing…..Maybe you can't put your finger on it, but you know: something is missing. And your customers can feel the effects of that absence in any case.
The answer: consistent, personalized experiences based on meaningful data and played out on every channel. And who deserves this outstanding support more than your loyal customers?