An economy on the cautious upswing, brand allegiance up for grabs, and mobile technology being the linchpin of it all meant that in 2012 loyalty programs achieved newfound relevance in attracting and retaining customers. Consumers opened their wallets this year and sought experience-driven brand engagement. But they did so in caring and cautious ways. It was also the year that a new term, omnichannel loyalty (OCL) not only came into existence, but gained prominence as an outgrowth to the convergence of marketing channels, be it offline, online, and Google’s new term “nonline.”
Big Data, a term that’s been around since 2008, became far better understood this year as data gathering and the ability to categorize and act on collected consumer metrics (items purchased, items viewed, website navigation, and the measurement of promotional and page layout impact) reached new levels of proficiency. Yet even with growing awareness, Big Data remains a major area of opportunity – especially as businesses of all sizes and industries use the insights gained from Big Data to drive business decisions and optimize communication, helping break down siloed corporate divisions. What all this means is that customer engagement and the experiences that effective loyalty programs deliver got a major boost as traditional brick-and-mortar analytics became so complex that brands can now predict and drive future purchases and incremental behavior not just catalog what was purchased. And the more the insights gained from Big Data are used, the better those predictions and ability to impact customer lifetime value will become.
Organizations as a whole also saw the mobile channel continue to mature as smartphone and tablet adoption rates rose and marketers engaged their customers via these channels in-store, at home and practically anywhere else. Social media like Facebook, Twitter, Foursquare and Pinterest also continued to evolve from simple communication tools to relevant and timely experience promoters.
As we race towards 2013, the Kobie Marketing team offers four predictions for the New Year:
- Converge to be Relevant – Research finds channel coordination and communication between those channels to be the number one challenge in 59% of retail loyalty programs. However, as consumer expectations continue to grow the need for further convergence will become critical in the New Year. The good news is that, as CRM, CEM and Big Data become more manageable (and actionable), program managers are finding new ways to utilize those channels effectively (and identify new ones if necessary) to connect with consumers in timely and relevant ways. That’s a central tenet in the push toward omnichannel loyalty.
- Digital Insights – The terabytes of data that are regularly being collected today, and expected to grow another 50-fold by 2020, mean nothing unless that data can be analyzed and acted upon. Today managers can accurately track a host of metrics including SMS opt-ins, click rates, digital coupon redemptions, average price points, guest location in hotels, booking history and even gender (should they desire). Ideally collected anonymously, such a wealth of information helps brands across all verticals form a more accurate consumer picture. The good news here is that many brands agree with this assessment. Nearly 88% of retailers “strongly agree” or agree that Big Data use was critical to their 2012 ad spending. The question for 2013 is, will your brand be in that 88% and what ways of applying collected data are you already thinking of to improve the loyalty experience and ultimately customer lifetime value?
- Personalization Becomes Key – Consumers want their brand interaction to be personal, genuine and on their channel/s of choice, whatever they may be. Although this seems like “personalization 1.0” brands are still missing opportunities to tailor the customer experience. Beyond the personalized SMS and emails, look to personalize consumer-facing touch points in real time and integrate further with social media through emerging tools like gamification and augmented reality (AR) – an increasingly popular technology which pulls digital information from web-based sources. That includes sites like Google Maps and social networks like LinkedIn and Facebook. AR superimposes that data on real-time images of physical world objects such as restaurants (so consumers can browse menus simply by pointing their smartphones at the buildings), hotels, retail stores, airports, etc.
- Mobile Loyalty – Considering how technologies and marketing channels are merging, the degree to which data generation from these channels drives positive feedback is critical. And much of that data generation and feedback rests with mobile technology. Adoption numbers alone should tell loyalty marketers and brands that mobile is where they need to be in 2013 if they’re not there already. More than one in four members prefers to access a given loyalty program via mobile. And, according to research by Banyan Branch and VIPdesk, nearly half (47%) of program providers have or are planning to develop a mobile app – all in an effort to capture the predicted $18 billion that mobile commerce will net by 2014. One of the most interesting developments within mobile as it relates to loyalty came in September with the launch of Apple’s iOS6 software and its newest app, Passbook. Designed as a one-stop-shop to organize users’ virtual gift cards, coupons, passes, tickets and loyalty memberships without physical cards, the app’s growing list of brands suggests that companies recognize the fully digital, paperless and card-less world is fast approaching. Call it a smartphone, call it a digital Swiss Army Knife or call it the gadget that gave us Siri–no matter what you call it, it’s where loyalty programs need to be.
Embrace and act on these four major trends shaping the loyalty industry- mobile, personalization, digital data and convergence – to make your loyalty program omnipotent and omnipresent in the New Year!
