This is a question that brands and marketers have struggled with for ages, but the impact has hit harder than ever as of late. We all know that the consumer from 2020 has evolved, and many have moved on to try new things – we all have. As consumer shopping patterns are starting to reemerge, brands are faced with opportunities to attract new members, while retaining their current ones. And unless you have a crystal ball – you’re probably in the same boat as most in trying to figure out the future consumer mindset. We have a trick up our sleeves though, and that’s data.
At Kobie, we talk about Triple Play Data, and that really means looking at the customer not only through the transactional (spend) and behavioral (activity) lens, but also through the emotional (feeling) lens. Consider how your customers are feeling right now. Many are overwhelmed by the volatile market and others are decision fatigued. Next, consider how your customers feel about your brand, and more importantly, how they want to interact with your brand. We’re not therapists, but we know a thing or two about consumer emotional motivations, we built a tool to measure it after all (wink wink, ELS), and we definitely know loyalty.
In order to activate the trifecta, or 360-degree view of the customer, brands need data. Knowing your customer profiles through data collection efforts offers a path to individualization that leads to loyalty, and loyalty in an unstable market is unmatched. We’re not just talking about programmatic loyalty too, (what we refer to as little L loyalty) and how many points a member earns, we’re also talking about overall brand loyalty (Big L loyalty). So as consumer activity and spending behavior ebbs and flows across industries, there are a few things to keep in mind when it comes to calming the customer storm and utilizing what we know about the whole customer to truly hone in on Little L and Big L loyalty.
Navigating margins in the wake of inflation
The common denominator that seems to bubble up across industries, maybe with the exception of Travel right now, is spending apprehension. We’ve talked about inflation. We see grocery prices jumping exponentially – don’t get me started on how much natural organic peanut butter costs right now. The truth is, while the cost of goods and (some) services have increased, for the most part, people’s paychecks have not. So how are consumers reallocating their money? Some are cutting back on non-essentials. Others are swapping brand names for generic, think CVS brand pain killers vs. Tylenol, and the trade-off debate that is occurring daily is no doubt impacting your bottom line.
So how can brands navigate this shift and still show positive revenue? One way is to flow promotions through items and categories with more wiggle room in their margins to help balance forecasts. Enter loyalty accelerators. Loyalty offers a unique angle for brands to test and learn different promotions and earn components. This approach allows members to earn loyalty currency faster, so members still feel like they’re getting a deal, and it shifts the brands’ liability from dollars to fractions of cents on the points. American Eagle did this recently by offering a 3x point accelerator bonus earning on all tops to help move inventory and incentivize sales without having to resort to more discounts. Double-click on this tactic by layering in the emotional motivator of the member so that the brand is optimizing CRM engagement in a way that resonates with the individual.
Hey, don’t forget about churn
With behavior shifts continuing to happen across industries, customers are leaving programs. So what are brands doing to plug the leaky bucket? Monitoring and activating. Churn modeling can help assess which customers are about to churn, so that brands can redirect marketing efforts to those people and start applying win-back strategies. Recognizing and engaging milestones can be an impactful strategy for win-backs, and brands can heighten the sense of urgency through validity dates. One strategy is to win-back through top-offs, meaning a brand’s modeling can identify inactive customers who are close to a reward threshold and offer a surprise & delight reward after bonusing the difference in points needed. You want your members redeeming, so double down on this strategy by shortening the redemption window to incentivize a faster redemption.
Meaningful promotions are the way to go
Understanding your customers’ emotional motivation can help you to better capitalize on milestone moments in the customer lifecycle so that you’re marrying the right offer (backed by behavioral and transactional data) with the right positioning (backed by emotional data) to optimize impact. Predictive insights can help to fuel targeted member offers and engagement optimization. Meet members on their journey and sprinkle in meaningful incentives or messaging that continues to nurture brand affinity and creates engagement.
If you’ve made it this far, you know by now that we’re not fortune tellers. We just love data. And we have models that make life easier to predict how behaviors will change so that you can put stopgaps in place to redirect some of those behaviors. Let’s take the guesswork out of number crunching and dabble in some analysis together. Drop us a line today to learn more about Kobie’s predictive data modeling and how to use the trillions of megabytes of data at your fingertips to reach your membership goals and add value for your members.