14


Q3 • 2021


FEATURE “These preferences related to your product


or service allow you to target customer segments that have intent,” King says, “and behavior data lets you offer a seamless experience and bring in customer satisfaction and customer service to make sure you close the loop.” If a strong loyalty programcan help form


the basis of a retention marketing strategy— and build brand love, as King says—it stands to reasonthat it can also be a marketing tool to recruit new customers and then keep them as well. To put it simply: your retention marketing strategy can also inform your acquisition strategy. The Pareto principle (named for Italian economist and sociologist Vilfredo Pareto) theorizes that 80 percent of a company’s future revenuewill come from just 20 percent of existing clients, which means most businesses have a small number ofhigh-value clients and a large number of low-value clients. Simpson says that by targeting high-value, high-potential clients, it’s possible to reverse that ratio and instead use marketing resources efficiently, aiming to make 80 percent or more of your clients high value. To implement this strategy, you’ll need to start with good customer data. “Identify your loyal, high-value customers,


then perform data analysis to understand the characteristics that can be targeted as part of your acquisition strategy, so you are focusing on attracting the highest-value clients,” Simpson says. “At the same time, you want to implement loyalty marketing strategies and programs to retain your high-value customers to increase their lifetime value.The beauty of this strategy is that by prioritizing your customer groups, you can strategically allocate budget and resources to attain the best ROI. But this strategy requires a customer-centric approach, which requires hypertargeting and personalization.” The goal of many loyalty programs is to


deliver discounts to people who make regular purchases. The best loyalty programs, however, don’t require customers to spend piles of cash only to be rewarded with trivial discounts.


THREE WAYS YOUR LOYALTY PROGRAM Ca


A lo y bringing


Can Inform Your Marketing oyalty program gathers transactional, demographic,


behavioral, preference, and customer experience data from various sources within the business and can craft compelling stories by means it


tactics


t can inform your brand’s overall marketing strategy, s, and creative development. Shirley King explains how.


H


Hyperpersonalized Marketing


1 2 3


Straight from the Horse’s


Customers who join a loyalty program provide personalized data at registration, and smart loyalty program managers have a welcome series and customer journey in place to capture actionable info going forward. This zero-party data allows for developing highly targeted and personalized offers that present members with what they have told the brand they desire or need.


r


H’ Mouth Opportunities to


Mh


expose your products to customers are diminishing due to privacy concerns, and consumers are


becoming more aware of


f how their data is being


used and who has access to it. Loyalty programs allow marketers to access data directly from customers rather than relying on inferred data or purchased


r data. y


g all this customer information together. That r


Predicting wNe Customers


By analyzing the


loyalty data, brands can predict which customers to target to become advocates within the program and which types of potential customers to advise marketing to target outside of the program.


“Consider your loyalty program an


opportunity to show your best customers how important they are,” Simpson says. “Deliver benefits that are so valuable that they would be foolish not to join and stick with you.” She stresses that loyalty marketing is designed to thank and reward customers for doing business with a brand—and not just once, but repeatedly. After all, your customers are choosing between you and your competition. “Showing gratitude recognizes this and


can reinforce that they made a good decision choosing you,” Simpson says. “Doing so can significantly reduce post-purchase


dissonance, and when done effectively, it can evoke an emotional connection between the customer and the brand. Emotional connections strengthen a relationship and increase the likelihood the customer will return to purchase again and/or tell others of their experience.” So, how can you show gratitude? The


list is never-ending. The best approach for your business will depend on a range of factors, including who your customers are, their preferences, the value and frequency of purchase, and how and where your clients prefer to engage with you.


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