Using personalization to drive engagement with your loyalty program

When it comes to gifts, they say it’s the thought that counts. But it’s still pretty uncomfortable (and even disappointing) when you open one and see something that doesn’t feel like it was intended for you. The kind of gift that makes you go: “Really? Why would they think I would want this?”

It’s a bit like the feeling you get when you open an email from a brand with a warm, fuzzy headline like “Offers picked just for you!” – only to see something totally irrelevant.

“Do they know anything about me?” you wonder, as the department store you buy makeup from offers you a 2-for-1 deal on men’s socks. “What are they doing with all that data I know they’ve collected?”

Unfortunately for brands, it isn’t just “the thought that counts”. Customers aren’t worried about hurting feelings, so there’s no need to pretend they like a reward or offer that isn’t right for them – they’ll just unsubscribe instead.
 

Personalisation matters to loyalty

For brands, this means that cracking personalisation is essential. According to a recent study, 56% of customers said they’d ditch a loyalty programme because the offers weren’t of interest, whilst relevant rewards were one of the top reasons they remained engaged.

And keeping loyalty members engaged is key – customers who are engaged with a brand are 3 times as valuable (over the course of a year) as those who are not.

So, personalised, relevant rewards are the secret to successful loyalty programmes. But how do you pull this off in practice?
 

Use your data

How do you give customers rewards you know they’ll like? By knowing and understanding them. And to do this, you’ll need data.

Start with explicit information – things the customer has directly told you about who they are and what they like. This will include demographic data, like age and gender, as well as any interests or preferences they’ve told you about through the sign-up process.

And if members haven’t given you much (or any) explicit data, chances are they’ve given you plenty of implicit information about what they’re interested in. This includes their purchase history, the content they engage with in your marketing comms, and how they interact with your app or website.

For example, you may not have any gender information about a loyalty member. But if they always click on the menswear links in your email newsletter and generally shop in this department, chances are menswear-related rewards and offers will go over well.

Remarkably, only 11% of loyalty programmes offer personalised rewards using information like location or past purchases – so if you can incorporate this data into your programme, you’ll be well ahead of the competition.
 

Add value to the relationship

Tailoring your rewards and offers to your loyalty members’ interests isn’t always enough. To build the kinds of emotional connections that keep customers loyal over time, you’ll need to add value to the relationship.

This means that rewards and offers aren’t just personalised, they’re relevant to where a member is or what they’re doing right now.

Let’s take a loyalty member, Sarah, who added a dress to her wishlist through her favourite retailer’s online store a couple of days ago. Today, she’s walking through town and passes their physical location. She gets a push notification through the loyalty app on her phone – the dress she was looking at is in store, in her size, and if she buys it today, she’ll get double points.

This offer isn’t just personalised – it’s relevant, timely and useful. It adds value to Sarah’s relationship with the brand long-term. And that creates a positive emotional connection that builds lasting loyalty.
 

Get the right tech

All this planning and strategy is no good though, without the technology to put it into place at scale.

To effectively use your data (as per the first point above) you’ll need the ability to link up with other data sources – including your ecommerce and marketing systems. This will allow you to pull in information about members’ past purchases, items on their wishlist, and their engagement with your marketing content.

You’ll also need software that can automate the selection of relevant offers for each customer using real-time data. When looking for a loyalty platform, data integration and real-time personalisation must be at the top of your list of requirements.
 

So, the right data, the right technology and a solid personalisation strategy should keep you from offering rewards and deals that make customers disengage.

Let’s go back to our gift example for a moment. Ultimately, giving someone a gift they’ll love requires understanding who they are. People you’re close to and have a strong relationship with hardly ever get you one of those gifts – because they know and understand you.

And if brands want to build an emotional connection with their customers – a lasting relationship – they need to do the same.