Customer loyalty programmes are in the midst of huge upheaval as new shopping habits and technology drive a dramatic switch to digital platforms as a primary source of consumer information gathering.
As consumers increasingly
combine online and bricks-and-mortar shopping channels into a single sales
journey, retailers are following suit, synchronising their sales platforms into
a smoother, omnichannel service.
This transformation in
the shopping journey is having a profound effect on the structure of
traditional customer loyalty programmes, switching the focus onto customer
experience as the key driver of loyalty.
The push into digital is
providing merchants with a tremendous opportunity to gather much more
comprehensive and insightful shopper data on their clients, allowing them to
offer much more personalised shopping experiences.
The model of a purely
transactional loyalty programme, where customers were given discounts in
exchange for carrying a loyalty card, is being replaced as demographics,
technology and shopping habits change.
"They want a level of personalisation, they want a consistent experience," he adds.
The advent of this new
paradigm has led retailers to seek to give customers a more streamlined shopping
experience, making personalisation the differentiator in the battle to win
Tim Mason, CEO of Eagle Eye
“If you have data, then you have to do something with it”
Are loyalty cards a thing of the past?
I don't think the
important thing is how you collect data, just that you collect it. The reason
why you want to collect data is you want to be able to know who customers are.
You want to be able to thank them for shopping with you, and, crucially, you
want to be able to identify them so that you can direct market to them because
direct marketing is more efficient than broad-scale marketing. Having this data
enables you to run your business better but the mechanism used to collect it is
not important. It doesn't need to be a plastic card.
How do you get more data to build up a better profile of a customer?
You need to create a connection between a customer's online and offline presence, connecting their
online presence with physical stores. For example, a brand can put an ad on
Facebook and attach a voucher to that ad.
The consumer signs up to
receive the voucher and will go into the store to redeem it. Now the retailer
has a trove of data which details how that Facebook ad connected with that
person and was redeemed at that particular store. It can also provide insight
as to the other items included in the shopper's basket, so you get a more
holistic view of that individual.
When I look at the rest
of the basket, I can see a whole load of other things giving me a greater
understanding about that person, like whether they bought nappies, or fine
wines, or if they bought health and beauty products.
All that enables you to start building lists of products usually bought by this customer, informing the direct marketing process and allowing you to tailor offers to the individual.
How important is the use of that data in building customer loyalty?
model that a business needs to follow is something I called DIAL: Data leading
to Insight, driving Action, promoting Loyalty.
are loads of businesses that have a load of data and don't do anything with it.
That's inexcusable. If you have data, then you have to do something with it. There
are plenty of ways of gathering data. Not one of them is
necessarily the right way but you have got to do one or more of them in order
to be able to create a comprehensive data picture of your customers.
Does data crunching to build better customer relationships require artificial intelligence or machine learning?
If you think about the
world in which we live in, Facebook, Google and Amazon are absolutely obsessive
about getting more and more and more data about you in order to
personalise and target what they do for you.
You can't leave
artificial intelligence and its application to your business to solely be the
province of Amazon, Google and Facebook. Otherwise, their business would be
more intelligent than yours and that is not a good place to be.
Tim Mason is CEO of Eagle Eye, a SaaS technology company that securely validates and redeems digital promotions in real-time for the grocery, retail and hospitality industries through its digital marketing platform, Eagle Eye AIR.
Tim's previous role was as Chairman of Bonmarché Holdings plc from 2013 to 2015.
Prior to this, Mason spent 30 years at Tesco in several roles, including Chief Marketing Officer, CEO of Fresh & Easy in the US and Deputy CEO of the Tesco Group. He was behind the launch of ground-breaking loyalty card scheme Clubcard.