May 12, 2023

Loyalty Spotlight: The Role Of Data In Loyalty Programmes

Any marketer worth their salt knows a data-driven approach to understanding customers better is the only way to go when it comes to devising a winning marketing strategy.

This same smart approach applies when thinking about loyalty and rewards.

Using a combination of customer data and insights drawn from research will help inform the shape of your loyalty programme if you’re starting from scratch as well as help you to evolve your offering over time to ensure it remains fit for purpose and continues to connect with customers well into the future.

There are a few important roles data plays within the loyalty programme ecosystem…

One - which should always be of interest - is to provide the brand with a better understanding of their customers via information and data gathered through the programme.  Not only is this going to make your loyalty programme better, but this insight can also be used across the company to inform broader marketing and business critical decisions.

Alongside this better customer view, using performance data (from how members are using the programme) can help point the way forward on how to refine and evolve the programme as you go. Loyalty programmes shouldn’t stand still and risk becoming stagnant. They should have momentum and a clear view of the future, allowing data and creativity to guide the way.

If both these elements are working well together then - you can bet your marketing bottom dollar - you’ll have a successful, positive ROI loyalty programme that customers use and love!

Building a rich customer view through capturing demographic and behavioural data

Upon signing up to a loyalty programme, customers may be asked to complete a simple profile to capture baseline demographic information, such as age, gender, interests and location. A great starting point, particularly with the pending move to a cookie-less world, where customer privacy is rightly being safeguarded and prioritised.

A loyalty programme allows brands to collect their own zero and first party data in a way that is transparent and fair, as the customer is wilfully exchanging personal data for something in return from the brand. As long as that value exchange is well balanced - i.e., the customer effort is perceived to be worth the reward from the brand - you’re onto a win-win!

For further richness and context, behavioural data can be overlaid on top of customer profiles to get a better understanding of their interests and actions. Things like loyalty programme site visits (how frequent / recent are they?), page interactions (which areas receive the most interest?) and number of transactions can create a deeper view of the customer and allow for better targeting and personalisation of both future rewards and communications.

Refining and evolving your loyalty reward offering through performance data

Once a loyalty programme is up and running and member data is being collected, now is the time to look at the reporting to see which parts of the reward portfolio are working best and which elements you may need to re-think or even stop.

As loyalty is typically an always-on environment, it’s important to have a regular reporting framework in place so you can objectively review performance data. It’s tempting to look for and compare against generic industry benchmarks, but each programme will have its own nuances… so it’s difficult to compare apples with apples. It’s far better to have a good grasp on your own performance data from the get go, setting targets based on metrics that ladder up to wider business goals.

For example, if you’re just getting started you’ll likely have a target to recruit a percentage of your customer base into the programme. For more mature programmes, the focus might be on member participation - looking at active rate data and reward engagement, reviewing data points to show reward views or the number of redemptions that helps to inform future reward planning.

Data plays a pivotal role in the success of loyalty programs, enabling businesses to personalize experiences and drive engagement.By leveraging customer insights, businesses can optimize program effectiveness and make informed decisions. However, it's crucial for businesses to prioritize data privacy and security to maintain trust with their customers.

With the right data-driven approach, businesses can unlockthe full potential of loyalty programs and forge stronger, more profitable relationships with their customers.

At Rapport Group, our team is experienced in developing and optimising loyalty programs that drive customer engagement and growth. If you're looking to develop a loyalty program for your business or want to optimise an existing one, we're here to help!

Coming up next in the series: The latest trends in reward loyalty programmes

Related articles

June 26, 2023

Loyalty Spotlight: The Latest Trends In Reward Loyalty Programmes

May 12, 2023
Rewards & Incentives

Loyalty Spotlight: The Impact And Role Of Rewards In Loyalty Programmes

Download request

Simply pop your details below to get in touch.