The key to data driven loyalty programs - feature image

The key to data-driven decisions for your loyalty program

Retail businesses are more reliant than ever on data to tell the story – it’s what drives continual growth, actionable insights and proven ROI. In New Zealand, 94% of people over the age of 18 are part of a loyalty program, a number that has remained stable since 2019. However, compared to 2018, active participation has significantly declined.

Put your consumer hat on for a minute – when was the last time you used or redeemed something from a loyalty program? If your answer is not lately, or never, you’re in the majority .

Loyalty program inactivity is a missed opportunity. While it can be attributed to several factors, it ultimately comes down to how your program works and what it means to your customers.

An effective rewards program becomes invaluable over time

If you have a customer loyalty program, chances are you’re probably on the hunt for acquisition, retention or branding (or a combination of all three). Problem is, none of that will happen if it takes too long to accumulate points, they expire too quickly, or the rewards just aren’t worth the spend. Think of it like this: if you’re selling compostable coffee pods, would you reward a loyalty member with an oil-based plastic Keep Cup?

Data is the key to creating a loyalty program that facilitates both brand loyalty and steady revenues. Remember, the cost of keeping existing customers is less than the acquisition of new ones.

What’s the key to all this data?

A data-driven approach to customer loyalty will give you a greater understanding of your customers – what’s important to them and what will keep them coming back time and time again. Combining those insights with an engaging and competitive program will help you make better decisions about your loyalty program.

Determine what data is important to your business
Most companies run loyalty programs that track transactional information related to purchase frequency and total spend. But some stories can’t be told with just quantitative data.

At some stage, you’ll need to engage with members to understand the customer journey as well. It’s qualitative data – feedback on the buying process, your products or just service in general – that will deliver the meaningful emotional data you need to better understand your customers and their purchasing behaviour. There’s also demographic data, but you may want to consider the following:

The acquisition of Zero Party Data. This is becoming fraught as concerns around data security rise. Changes to the Appleverse, along with upcoming moves by Google and others, are encouraging consumers to become more aware of their willingness to share their data.
Consider different sources of data. These changes will mean you’ll need to look at other data sources to gain a better understanding of members. Know their motivations and you can start tailoring your messaging, offers and rewards to enable heightened engagement.

Measuring the success of your loyalty program

So, you’ve put the hard work in, and you know your customers, but is it working? It’s time to make some decisions around what measurements determine success.

Are members of the program shopping more times a year than non-members?
Do they, on average, have a larger basket size?
Are rewards increasing activity?
What percentage of rewards are lapsing?

Remember, no two customers are the same, so you need to leverage a combination of data to send the right messages at the right time – and to the right members. This will help you gain traction in your loyalty metrics and turn customers into brand ambassadors.

Leverage your loyalty program data, get results

Loyalty program data delivers great insights into why people purchase and engage with your business. When used effectively, it can tell you where to invest your time and money and how to tweak your strategies. Identifying gaps and using data-driven insights to make decisions will ultimately grow your business.

At Datamine, we take the guesswork out of data, delivering valuable insights that help businesses maximise ROI and drive confidence in your loyalty program data. Get in touch with us today.