Today’s customer loyalty game

In our new series of articles on customer loyalty, CMO talks to experts and leading Australian brands about the importance of loyalty programs and the role they play in the overarching quest to achieve relevant and timely one-to-one conversations with the customer

Customer loyalty isn’t just about a points-scheme either. Richardson pointed out brands like the Four Seasons Hotel and Ritz-Carlton focus on personalising customer services rather than offering discounts or points-based schemes. The world’s most valuable brand, Apple, manages to instil loyalty within the products it produces and related services around those. But in all successful cases, it’s the combination of transactional information with emotional and behavioural drivers that drives the engagement.

Measurement and metrics

There are ways of measuring aspects of a loyalty program, such as click-through and sales rates from specific communications, how many people use their cards and if members are spending more in your store, but Richardson admitted it’s difficult to get a holistic picture.

One area she emphasised as a growing opportunity, however, is the power of mining the data to find new insights that both drive the bottom line and better customer experience. A recent example she used was in Myer’s womenswear department, which groups products into three segments: Classic, modern and contemporary.

“From the transactional data, sales staff know how much is sold, in what size and so on but what they don’t get is who is buying it,” Richardson explained. “As a result, they were just sending out information to customers classified in those same three types.

“Through data analysis, Myer found out the biggest group of people [by a factor of ten] actually shop across all three types. Instead of sending out three different direct mail catalogues, Myer now sends one direct mailer to all people who shop across all three categories, and depending on what category they buy from the most, put that information at the front. Not only has Myer saved money, sales have gone through the roof.”

At Woolworths, the success of Everyday Rewards is measured through data analytics and constantly tracking and understanding what customers are saying and telling the retailer, Amos said. The company also uses net promoter scores, physical share of wallet, and activity across different customer segments.

“As an organisation, we have rapidly evolved our use of both data-driven marketing and customer information,” she added.

Emerging applications

As with most of the marketing sphere, technology is playing an increasingly crucial role today not just in the management of programs, but also in enabling organisations to better understand and relate to consumers.

The rapid rise in mobile usage and digital communication methods are now proving game changers for in the customer loyalty space.

“Mobile is brilliant for customer loyalty,” Richardson claimed. “With the Myer App, you can now access your loyalty program on your mobile while in-store, your rewards are sent to it, and the company can extend push notifications to mobiles about special offers. Geolocation is the next component of that.

“We’ll reach a tipping point where [loyalty] cards just disappear. Retailers need to get real and understand people are not going to carry their cards any more. They either need to partner with a much larger organisation, form a partnership with a bunch of other business, or go electronic.”

Amos agreed brands need to make sure their communications are relevant and available any way people choose to access them, whether that’s through digital marketing or smartphones.

“Mobile as the primary device is something we’re really starting to focus on as we see that as a huge opportunity,” she said. “With the Woolworths mobile app, the offers you receive that are personalised and targeted to you as an individual from EveryDay Rewards are now accessible when you tap into the app and login.

"The way people even read their emails is also changing on mobiles, so you can’t stand still. For us, it’s about constantly refining and changing that user experience. That flows through to our website and signup process.”

Because the digital and social experience is personal, customer loyalty managers also have more ability to bring targeted content to life, Amos continued. “Digital allows you to take that dialogue into a new channel and really personalise it,” she said.

“Ultimately, we are focusing on making sure our communications and customer experience from start to finish is as seamless as possible.”

Follow CMO on Twitter: @CMOAustralia or take part in the CMO Australia conversation on LinkedIn: CMO Australia.

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