With the promise of omni-channel customer engagement guided by big data taking the world of marketing by storm, it comes as no surprise that many marketers looking for actionable customer insight are finding it through their loyalty schemes.
While too many companies still see a loyalty programme mainly as means of rewarding customers, those that get the most from schemes view them as a platform for gathering comprehensive data on customers’ preferences, needs and circumstances. Once this data has been analysed, companies possess the insight needed to develop stronger and broader customer relationships, which is the real competitive advantage of schemes.
A GI Insight survey of 1,000-plus UK consumers confirms that well-managed schemes do foster loyalty, while arming brands to elicit greater spend. Having detailed insight on buyers ensures a company can send out targeted offers in tune with customer expectations and habits, while consumers themselves see real value in this tailored approach.
Indeed, the research also shows that consumers are happy for their personal details to be captured, as long as they benefit and the brand effectively reads their situation on an ongoing basis. According to the survey, 64% of respondents said they were happy for a company to hold and use their data as long as it uses the information to send them “relevant and timely offers and communications”.
A loyalty scheme not only provides the tools for capturing customer data but, by its nature, also ensures the company then has the necessary permissions to use that data. In fact, the vast majority of consumers see schemes as an essential foundation for an ongoing relationship – so much so, 76% do not want to hand over their data to a business unless it has a “proper loyalty scheme”.
A scheme positions a brand to continue engaging customers and enticing them to spend more, while flagging upselling and cross-selling opportunities. The research shows 87% of consumers say that, where a company has a good loyalty programme, they have continued purchasing from that brand over the last few years, while 33% have switched brands because of a better scheme.
A strong loyalty programme can also equip companies to more effectively target scheme members online as they are shopping – as long as it has the technology to combine real-time data with the long-term offline view of customer behaviour and needs, so it can more effectively address their priorities ‘in the moment’.
At its heart, a well-run loyalty scheme provides a mutually beneficial value exchange: customised rewards for customer knowledge. This becomes the basis for a continuous relationship that satisfies both sellers and buyers.
Andy Wood is managing director at GI Insight
