Gathering first-party data is one of the “grand prizes” for loyalty programs – but why is it so important? And what does a brand do with this data that can create such a strong difference in its customer experience?
As a brand, each time your consumers interact with you, they are providing bits of information about themselves that you now have the opportunity to use to your benefit (and of course, their benefit). Some of these interactions are direct – you might ask a question directly related to their profile, or your customer makes a purchase. In other cases, it is indirect, such as interacting with certain types of content or location-based advertisements.
In a recent survey by Alteryx on nearly 350 retailers and brand manufacturers, 81 percent of respondents stated that they gather shopper insights, but only 16 percent reported that they felt they were experts at, “harnessing the data.” On the road to 1:1 personalization, this feels like a huge disconnect, especially when 70 percent of consumers stated they would be willing to provide more information to businesses if there was a perceived benefit to them. Namely, security and convenience were at the top of the list of benefits. These stats highlight something most of us already know: data is necessary, and we need it to be accessible for truly effective personalized marketing efforts. However, many marketers are working with data from point of sale (POS), e-commerce, a customer relationship management tool (CRM), a customer data platform (CDP), campaign management systems, a data warehouse, a data lake and countless other partner systems. To say it’s a challenge to leverage first-party data in a meaningful way would be an understatement.
Some of the systems mentioned above, especially the CDP (a marketing hub for creating a single view of a customer) and the data lake (a single repository of all enterprise data, typically in raw form for analysis) can be huge undertakings, both in budget and timing, for a company to develop. So, how do we use the first-party (and other) data you already have, even when it resides in other systems?
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Don’t Try to Boil the Ocean. Start small by segmenting your customers in ways that make sense for your program. For retail, start with major segments like credit card holders, customer regions, and overarching shopping habits like location, products and channel. For financial programs, cardholder products are huge. For entertainment, past history can be significant in looking at preferences, likes and dislikes. For travel and hospitality, knowing whether they are a business user or a personal user can help delineate communication styles and offers or further feed your segmentation. It might sound obvious to start looking at things like where someone resides, whether or not they already have a credit card with your brand, or what their key preferences are, but it’s surprising how often we see brands missing these vital persona elements in their customer interactions. Data like this can typically be easily captured and used to decrease friction between you and your customer. Customers don’t want to see advertisements for California events when they live in Florida. It makes them feel like you don’t even know them. And if that’s true, what incentive do they have to feel loyal to your brand?
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Leverage Loyalty to Build More Loyalty. Loyalty can often be a unifying source of data for the ability to market to a customer like you know them personally. A loyalty strategy or program can help support data collection and create a long-lasting, trusting relationship with consumers that you can leverage for data collection of vital information to personalize their experience. Often, the loyalty database can help support integration between systems and create the possibility to leverage data from multiple systems to elevate interactions with members.
A common point of frustration for customers is a request from your brand for something they’ve already done. For instance, a request to repeatedly apply for a credit card when they already have one. This might be due to the fact that the credit card issuer and the customer database might not be as tightly coupled as they should be. A loyalty database can hold information about who is a cardholder (and more!) and help bridge the gap for your existing customer database.
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Integrate Wherever Possible to Extend Your Data. If your team does not have access to some or all of the data points discussed here, look at your overall data flow and across sources of truth outside your ecosystem to determine if a batch file can help you pull that information to a system that enables you to use it in your marketing efforts. Often, integration can be the key to creating a seamless customer experience, so don’t shy away from it. Use it to your advantage.
API integration, while requiring the most IT support of the suggestions here, can also help support your initiative. APIs connect two systems together in real-time to send specific data back and forth. They can help to pull information from disparate systems to make it appear to your customer as if there is a single source of data, when in reality, there could be eight or more systems holding their data. This is a great solution for in-store and online experiences, where you can pull in customer preferences and details that help support a more tailored experience.
Showing local options powered by backend data on where someone resides or changing banners based on whether customers have a credit card or not may sound like small nuances, but they truly help to build a trusting relationship with your customers and in turn help you ask for more data. With more data comes the ability to hone your marketing messaging to a stronger and stronger degree over time. The ability for your brand to help make a customer’s experience with your brand more convenient and personal translates to a stronger emotional bond with customers which translates to an increase in sales, among other important metrics like customer retention and customer lifetime value.
The good news is, you can start small and make a change today, even if you have data in disparate systems. Start using your data wisely to create small wins with your customers. They’ll notice – and you’ll reap the benefits of a strengthened emotional bond.
Kobie Alchemy® X can digest disparate information into one source of truth — read our solutions page for all the answers.
References:
Alteryx. Shopper insights: insider perspectives infographic
https://www.alteryx.com/shopper-insights-insider-perspectives-infographic
Experian. 2019 Global Identity and Fraud Report.
https://www.experian.com/decision-analytics/global-fraud-report
