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How to Transform a Loyalty Programme into a Customer Acquisition Tool

For decades brands have been leveraging their loyalty programmes to increase customer retention and boost lifetime value. Loyalty programme data can be used for so much more, however. For instance, it is used to acquire highly profitable new customers. 

In the latest episode of Epsilon’s Let’s Talk Loyalty podcast, Joseph Taylor, Epsilon’s Senior Vice President of Strategic Operations explains how to transform your loyalty programme into an engine for high-value customer acquisition in three steps. 

Unleashing additional value in this way – and delivering that value to other departments such as acquisition and marketing – can contribute toward the business case for a loyalty program of scale and quality. 

Step one – build a solid data foundation 

Consumers are increasingly wary of sharing personal information, which is understandable. This means that brands looking to establish a strong foundation of first-party data must do two things:  

    • Reassure customers by collecting data in a transparent and compliant manner and stressing that all shared data will be held securely and used only for specified reasons.
    • Offer customers a compelling value exchange in return for their data. This value exchange, for example, can include exclusive offers and personalised experiences. 

Marketing teams often form partnerships with specialist providers, such as Epsilon, who have experience and expertise in designing, implementing and optimising CRM and loyalty capabilities in a privacy-compliant manner. 

Which brands offer a winning value exchange?  

Joseph Taylor, Epsilon’s Senior Vice President of Strategic Operations, highlighted Marks and Spencer’s Sparks loyalty programme in the latest Let’s Talk Loyalty podcast. He said the current, refreshed, Sparks programme stands out because it offers such an engaging experience. “It’s app-based, has personalized offers, and it features weekly competitions and prize draws,” he said. 

Step two – Use data to understand your customers 

Once a brand has started to recruit loyalty programme members and has begun gathering its data, it can build high-value customer profiles. This often involves selecting an experienced and reliable partner who can match first-party loyalty data to a cookie-proof customer identity graph.  

This approach enables brands to identify high-value customers, as well as high-value prospective customers who could be recruited profitably. Taylor says that this approach, driven by loyalty data, enables brands to prioritise quality over quantity when customer acquisition campaigns are being planned. 

What is a customer identity graph?

An identity graph provides a single unified view of customers and prospects based on their interactions with a product or website across a set of devices and identifiers. An identity graph can be used for real-time personalization and advertising targeting millions of users. 

Step three – Finding look-alike high-value prospects 

The last step is to use these enhanced customer profiles to find new audiences which are similar to your best loyalty customers,” says Taylor.  

This strategy is known in the marketing industry as look-alike modelling. By identifying and understanding your most profitable loyalty customers a brand is then able to actively look for and convert similar customers. 

Taylor said: “The right identity partner, with a strong market reach, can analyse the size of a brand’s market opportunity online. You can see how many customers are out there that look like your best loyalty customers.” 

Armed with this information, it is then possible to start devising new strategies to recruit high-value prospects. 

>> Listen to the latest episode of Epsilon’s Let’s Talk Loyalty podcast for more insights into leveraging loyalty programme data. <<

Download the Ultimate Guide to Building a Loyalty Programme