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Beyond transactional data: A look at loyalty and the omnichannel customer

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15th May 2013
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Omnichannel customers generate huge amounts of data - which presents new challenges and opportunities for brands.

Many brands enjoy a certain degree of loyalty, driven by an emotional connection or affection for their visual presence or heritage. But brand loyalty doesn’t necessarily translate to committed loyalty, the much sought after state that leads to increased sales and customer value.  With many long-standing and well-loved high street brands suffering over recent years, affection alone just isn’t enough to keep businesses afloat these days.

People now carry anywhere from 5-15 loyalty cards in the same wallet, and more than ever habits can change and are less entrenched, with allegiances switching at the first sign of a new promotional offer. So what is true loyalty?

Committed brand loyalty is essential for the success of companies and the key to achieving this is getting the omnichannel customer experience spot on. This comprises three things:

  • From a technical perspective, being able to take a view of a customer across multiple channels and data sources.
  • The ability to use that data to develop your understanding of the consumer and to develop relevant personalised marketing interventions that are underpinned by that understanding.
  • Following through to deliver those interventions to the consumer via the right (omni) channel and timings, with the right message.

It is the relentless pursuit of understanding that enables the delivery of superior customer experiences. The word ‘understanding’ is often used amongst marketing professionals, but a brand that really does understand the consumer is quite rare.

Now more than ever before, customers want to be understood for the individuals they are. By adopting highly targeted and personalised omnichannel communications strategies that speak to your customers about the products and services that interest them, you will translate your brand attachment into greater buying frequency and breadth. Social networks offer brands a unique opportunity to connect with their customers in a whole new way.

The difference between “loyalty schemes and “loyalty”

Impactful data-driven omnichannel campaigns featuring relevant content that resonates with the customer lead to the holy trinity of increased customer value, high purchase frequency and genuine loyalty.

Omnichannel consumers generate huge amounts of data and in some cases they may not be aware they are doing so. For example, when a retail app is used on a smartphone, locational data is generated that can be used instantly to deliver very relevant store-based offers. The key point is that for committed loyalty to be successful, brands must practice the following:

  • Be transparent from the outset with their consumers about how they plan to use their data – make sure they know what they’re signing up for.
  • Ensure there is a ‘fair exchange’ – in other words, ensure you keep your commitment to use the data to the consumer’s advantage, not just your own.

Often, introducing an incentivised loyalty scheme can simply erode margins for brands, particularly those that already enjoy a high level of committed customer loyalty. However, if done correctly, a loyalty programme can pay dividends, by helping a company build a comprehensive data asset, which can be used to drive value.

Building the customer picture

A fully-rounded picture of a customer is the key to delivering the required levels of understanding. Big data offers many opportunities to build upon and enrich your view of the customer. It is possible to populate a database partially through payment card transactions or delivery addresses, but this only offers an incomplete or potentially ambiguous picture of the customer. For example, the absence of data on cash transactions could seriously distort your view of a customer’s behaviour. Hence this is no substitute for actual transactions linked to an individual.

This is where a membership rewards scheme comes to the fore. The more robust, complete data captured through a loyalty card can be transformed, through analysis, into predictions and insight – creating communications that influence behaviour, driving the right kind of committed loyalty as opposed to incentivised loyalty.

Rewards schemes have their benefits but to ensure brand loyalty they must be part of a wider engagement programme. If brands focus solely on reward schemes, customers will make their purchase decision based on incentives rather than loyalty, and allowing competitors an easy opportunity to undercut.

Going beyond transactional data

In FMCG, reward points promotions (advertised on pack with a code to register online) provide insight into purchasing patterns as well as consumer behaviours and attitudes.  Targeted surveys to registered customer groups provide a better understanding of what drives their purchase behaviours and what they really want from the scheme. This direct connection with the consumer increases a brand’s ability to retain these customers and provides insight into the type of offers that will appeal to casual buyers and drive behavioural change. 

Brands must act cleverly and responsibly based on this understanding. Data, analysis, insight and evaluation will all help to build and establish genuine, mutually beneficial relationships between consumers and brands. And by that we mean you can hold a relationship at the level the consumer wants it, they may buy your stuff but really not be interested in being “engaged “.  It’s as much about understanding the nature of that relationship at a particular point in time.  And like all relationships, as understanding grows, people are more likely to share more about their desires, needs and motivations.

With a superior omnichannel customer experience at the heart of your loyalty strategy, you can influence the emotional drivers that ‘schemes’ rarely touch. A great loyalty strategy will give you the insight you need to deliver highly personal, relevant and resonant communications that are geographically specific and timely, informed by everything you know about each customer right now. 

Nick Evans is marketing practice director at Jaywing.

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