The following is a guest post from Lucy Sharman-Munday, CFO of digital marketing company Eagle Eye.
Customer data is at the heart of nearly everything a loyalty marketer does. It informs the type of rewards and incentives being offered to each shopper or member, the personalization and timing of communications, to the efficacy of the loyalty program itself.
For consumers, though, their personal information is increasingly a currency unto itself. Consumers are cognizant of the value their data provides, and they are only willing to trade it for something that they value in equal measure. But this balance of value is in flux — the days of consumers willingly (or hurriedly) offering up their personal data in exchange for access to a loyalty program are gone, especially in the wake of Facebook's Cambridge Analytica scandal.
Today, consumers want more — a lot more. They realize that the balance of power has shifted in their favor, and that even while shopping in stores, they have access to information, choice and alternative purchasing options (hello, Amazon) instantly accessible from their mobile devices. From the brands they patronize, they expect personalized communications and unique offers that reflect the products they purchase most often. They want rewards they can easily access via their preferred channels, whether that means print coupons, emails, SMS messages, in-app notifications or a specific combination of these. Major retailers like Sainsbury's in the U.K. and Loblaw in Canada have listened and are successfully leveraging data to create diverse and highly-targeted offers based on each customer relationship.
How can loyalty marketers use customer data in a way that simultaneously encourages engagement with the brand, creates value for consumers and incentivizes shoppers to continue sharing their data?
Understand the value of personal data and what consumers expect in exchange
This is the obvious starting point of any data-driven strategy. A recent report found that 45% of Canadian consumers expect something tangible and valuable in exchange for their personal data, including offers and communications tailored exclusively to their wants and desires. Data shows that these expectations go even further, particularly for Canadian millennials. Sizable contingents expect personalized incentives and rewards (35%), improved omnichannel customers service (25%) and geolocation-based mobile offers (20%).
Some of these results are to be expected. After all, consumers enjoy the "just for me" feeling of personalized offers and communications, and they understand the logic behind providing their individual information and preferences required to facilitate that. But the variety and nature of the responses suggest that consumers understand that their personal data is incredibly valuable to the brands they engage with, and that they have clear ideas about the capabilities brands ought to have in order to meet their needs.
Leverage technology and data to create true connections
For most retail brands, having a tech solution in place to collect and manage customer data is important not just for the sake of creating a holistic view of the customer but also for meeting customers' expectations around brand interactions. Personalization at the level consumers expect is impossible unless a brand can extract data from both loyalty programs and other customer touch points, organize that data in a centralized way and leverage it effectively. With the right technology and partners, brands can move beyond simply meeting their loyalty members' expectations and begin anticipating and exceeding them.
Ensure data security and know the rules
Complicating this dynamic is the heightened awareness around data security. From continual data breaches and new regulations (like GDPR now impacting EU marketers), individual data protection is top-of-mind for consumers around the world. This environment alters the decision of whether consumers share their personal information, so the exchange with the brand must be compelling.
Balancing the premium consumers now apply to their data with the imperative that loyalty programs collect and utilize that data optimally will be a preoccupying theme for loyalty marketers through the end of this decade. The most successful brands recognize the impact data has not only on their loyalty strategy, but their overall business objectives, and they're making strides today to collect and analyze the customer information available to them for tomorrow's use.