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Customer loyalty: Digging into data


21 Aug, 2017 10:03 am

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.

The concept of customer loyalty has radically changed with shoppers now keen to forge relationships with the brands they trust, says Bhavesh Unadkat, Principal Consultant, Retail Customer Engagement, Capgemini Consulting.

"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 loyalty.

Interview:
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?

© Eagle Eye
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?

The model that a business needs to follow is something I called DIAL: Data leading to Insight, driving Action, promoting Loyalty.

There 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

BIO:

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.
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