Learn more about loyalty programs and first-party data, by watching Ralph Browning's presentation at The Advanced Customer Loyalty & Retention Conference.
Why it matters?
As cookies and third-party identifiers disappear, brands recognise the critical role loyalty programmes play in collecting first-party data. That's why they're putting greater emphasis on this strategy. 92% of marketers consider first-party data vital to understanding their audience, and Deloitte forecasts that brands will increase their first-party data usage by 61%.
But how should brands structure their programmes to gain the data needed to drive insights, engagement, and influence?
Deeper dive – 8 best practices for a successful loyalty programme
Based on our experiences working with brands, here are the lessons we have learnt when seeking to develop a loyalty programme.
- Measurement is vital: Unless something's measured, it's not treated seriously. This makes having a first-party data KPI essential to any loyalty programme. For example, ensuring 80% of customer data deemed crucial is collected and put on file within six months of them signing up. Put measurement at the beginning of your planning, track it, and report it.
- Start with the end in mind: Collecting data for the sake of it is wasteful, unnecessary and can have privacy implications. Know the two to three critical pieces of customer information you need from the start. Then work backwards to identify your route to obtaining this.
- Remove the barriers to entry : Make it simple and quick to sign up. Lengthy forms and too many questions deter people from joining. Make the process short and ask for just the minimum information you need to maximise sign-ups.
- Adopt a data creep approach: Take the long view when looking to gain customer data by collecting information over time. Identify key moments when people will be receptive to providing it – e.g., when redeeming points – and focus on these to enhance your insights. And when you ask, keep it friendly and conversational.
- Know your customer journey: Understand how you will move customers along a path and the necessary incentives to offer to encourage them to provide the data you need.
- Implement the carrot and stick: One option for moving customers along their journey is the carrot and stick approach. After all, there needs to be a value exchange in all good loyalty programmes. This means raising the spectre of a customer being unable to benefit from the scheme if they don't keep their end of the bargain is a logical step. It can work. But it's not for every brand, so only use it sparingly.
- Introduce gamification: Use games, polls, and surveys as a fun, engaging and subtle way to gain additional customer insights so you can better communicate and sell to them. For example, beauty brands successfully use polls around which make-up types look best to gauge a customer's potential product preferences from the answers given.
- Understand what customers want: Get critical programme data by finding out what members feel about the programme and which rewards interest them. Understanding what they're aiming for allows you to encourage them to take the necessary actions to move them closer to achieving this. They gain, and you gain.
Evolving a loyalty programme
A prime example of an evolving loyalty programme is Kellogg's Family Rewards.
Traditionally based on collecting coupons, changing consumer interests and a desire to acquire more first-party data have led to it being revamped.
Incorporating an easy sign-up process, the focus was to maximise the number of programme participants. And a changed reward structure offered monthly rewards based on collecting tokens. However, these are not solely spend-based but could be gained by completing surveys, joining in games, watching videos, or providing likes. All these vehicles offered up more ways for Kellogg's to gain additional consumer insights.
Additionally, allowing receipt scanning on mobiles also revealed insights into individual consumer spending patterns and timings. Sharing these insights with supermarkets to enable them to offer incentives to relevant audiences meant the programme became more impactful and valuable.
The bottom line
While consumers are sensitive to sharing their information, they are comfortable exchanging their data via a loyalty programme. Indeed, 76% of consumers say they are reluctant to do this, unless it's tied to a loyalty programme. This makes these schemes a method not only for customer insights, reducing churn and cross-selling but also for acquiring critical first-party data that is valuable for driving future marketing.