Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
Customer loyalty has become the data and analytics engine helping retail conglomerate, Landmark Group, breaking down barriers between its brands and helping marketers engage in increasingly sophisticated and personalised activities with customers.
Landmark Group, which was founded in Bahain, operates more than 2000 outlets across the Middle East, North Africa and the sub-continent, with 55 brands. The retail conglomerate is represented in 15 categories and also has the largest retail loyalty program in the region with 15 million members.
The ‘Shukran’ loyalty program has been developed over the past five years and is increasingly tapping into a plethora of data sets to improve engagement across different customer touchpoints, including social, digital and in-store.
While Landmark had been operating a loyalty program since 1999, the initial challenge was it only had point-of-sale (POS) data to work with, the group’s head of marketing and customer experience loyalty, Akshay Manikantan, said.
“We didn’t know it was you who made that purchase or could create a persona around that, so there was a big bridge to cross between the transactional approach and a more analytical one,” he told CMO during an interview at the recent ADMA Global Forum.
It was when the program was extended across regions in 2010 that its data potential started to be noticed by the whole group. As program owners, the loyalty team gained a unique ability to talk to all of the brands across the group and across territories, Manikantan said, as well as a bird’s eye view of customer data across silos.
By 2012, the team had started to look at how to better make use of its data. “We had tonnes of transactional data flowing, but we never really knew what you were doing outside the stores,” he said. “Influencing you, getting to know you pre-purchase was a huge challenge. So what we said was let’s mine the data to understand where the customer fits.”
Loyalty today is a core KPI for each business, Manikantan said. This has seen brand marketing campaigns increasingly adopt a loyalty angle, triggering a cut back in above-the-line spend in favour of below-the-line engagement.
“If you really want to engage with the customer, you have to be smarter and digital, and that’s where loyalty fits across our group,” he said.
According to Manikantan, the old school marketing funnel doesn’t cut it anyone. “It’s a funnel which needs to nowhere,” he said. “Now, it’s formulation, pre-commerce, commerce, post-commerce.
“The customer is evolving – it’s not the same customer we used to target 5-10 years ago. He or she knows more than what we know as marketers. Right from awareness, we want to reach a point where there is an entire bond, and the customer becomes your advocate.”
To get there, brands must talk to consumers in a more targeted, engaging way, Manikantan said. “It’s all about personalisation, making a difference and creating individual personas and talking to them in an individual manner,” he continued.
“You have to understand their behaviour, study their attitudes, and evaluate what you need. You need to create a person around every individual, each and every person we want to sell to. And we want to create relevance and build a bond with them.”
Building out customer data smarts
Manikantan and his team have spent the past 18 months working to own and support the entire lifecycle and customer experience journey using data.
One way it’s achieving this is by uniting purchasing trends, attitudes and transactional behaviour to create a multi-dimensional segmentation strategy. This is used to not only work out who to offer things to and when, but also what to offer different customers.
Specifically, Landmark’s loyalty team has grouped customers using a range of data identifiers: Cultural (environment, subcultures, classes and trends), social (such as community groups, family, role and status), psychological (motivation, perceptions, learnings, attitudes) and personal (demographics, purchasing power, lifestyle and personality). It’s also attempting to tap into lifestage segmentation in order to understand which products and services are most relevant to an individual.
In addition, the team is using recency, frequency and monetary spend to categorise members for VIP and Gold status, but equally, to work out the least valuable customers across its member base.
There’s also investment going into ‘headroom segmentation’ – based on purchasing patterns and items a customer has purchased – along with a digital user segmentation matrix that breaks down customers into six segments: Wannabes, mainstreamers, nomads, analogue users, paranoids and chameleons. By looking at which customers fall into each segment, Landmark can start to appeal to them in a relevant channel, Manitankan said.
All of this highlights the importance of data and analytics to modern marketing, he said. “Without data, we’re just running left and right,” he said. “We have to channel data into a strategy that will deliver maximum outcome to our customers.”
Off the back of these customer segmentations, Landmark is building out cohorts and campaign strategies that address a customer’s entire lifecycle, from acquisition to onboarding, rewards, retention and repurchasing. It’s also using product/seasonal cycle and individual store data to top up these activities.
To support these activities, Landmark invested in Oracle’s Responsys platform six months ago, gaining the technological ability to plan, set-up automated campaigns, conduct more comprehensive A/B testing, plus produce all sorts of reporting, analysis and optimisation which can be shared with different business units.
Manikantan said the plan is for loyalty to first fully grasp the platform as champion users, then extend it to other markets and teams. There’s also plenty of work to be done building out further customer segments and approaches.
“Right now, we’re building out a social profile, which is the most challenging,” he said. “You could like bags, but be talking about shoes on Facebook. With the platform, we can start building a social profile not just with transactional data… Once I get that, we’re going to start getting into other areas such as push messaging… and we’re also looking at proximity marketing.”
Other immediate priorities include working on next-best offer recommendations for customers through campaigns, then looking at cross-brand promotion to drive more upsell. Another focus for Manikantan is relevancy.
“You may require a suit, but you make not require a brown suit, so getting into that sub-class category is becoming more important,” he said. “We have invested in some smart words, text optimisation and building blocks. My highest goal is getting my engagement measurement up. And for us, that’s churn. I want to arrest the churn and keep them engage.”
Finding effectiveness and results
According to Manikantan, the move to a digital and personalisation based approach has already proven to be 43 per cent more effective. As an example of the success of its digital efforts, he pointed to the 19 per cent response rate on Landmark is achieving on SMS messaging since customising content down to the product level.
“It’s not about doing more, it’s about doing it more individually,” Manikantan said. “My entire strategy is about relationship; it’s no longer product, price, promotion or place, it’s all about relationship.
“We are at an inflection point – the consumer is far more dangerous, knows what is right, right kind of offer being made to them. We need to run campaigns around each dot of these programs.”
To help brand teams better grasp a data-driven approach, Manikantan said the loyalty team has undertaken account management activities internally, helping people to understand what data is telling them and use it to run more effective campaigns.
“That incremental shift got the concept really moving right across the business,” he added. “Now, it’s about keeping the consistency and momentum.”
Read more about customer loyalty:
- How ANZ is rethinking customer loyalty programs
- Why Victoria Racing Club overhauled its customer loyalty program
- 4 brands making customer loyalty programs work
- Are customer loyalty programs stuck in the past?David Jones looks for one-to-one customer relationships with loyalty program plans