8March 2022THE "HOW" MATTERS AS MUCH AS THE "WHY" WHEN IMPLEMENTING LOYALTY PROGRAMMINGAs impending actions by Google and Apple shifts power to consumers to determine how much of their online activity is being tracked and shared, customer knowledge and the need to have a holistic view of customer interactions is being pushed to the forefront for many retailers. This shift to consent-based targeting is forcing retailers to place a premium on harnessing and managing their 1st party data.A retailers 1st party data is any information that has been willingly provided by their customers as part of an interaction with the brand. This could be anything from an email address, mobile phone number, birthdate, address, website, or app actions or even data from surveys or customer feedback.The issue that most retailers face is not a lack of data from their customers it's the lack of a data strategy to manage and organize this data into a usable and actionable format. One of the key barriers is simply that from transaction to transaction some retailers don't have a process in place to resolve identities. This means that the ability to stitch together a customer's full transactional history as well as other brand interactions is either spotty or non-existent.When there is no compelling value exchange between a retailer and its customers to prompt a customer's willingness to share their data consistently this hampers the enterprise's ability to have a robust identity resolution process. Often this is when the discussion around implementing loyalty programming surfaces. And while it is true that loyalty programming can create this mutual value benefit, the extent to which this is successful is largely dependent upon not only why a loyalty program is needed but how loyalty programming is derived.The diagram below speaks to 5 key elements that should be considered when loyalty program development is being considered. Let's look at these in detail.DEFINE Probably the hardest solvewhen developing loyalty programing is how to forge a deeper emotional connection to the brand. Simply exchanging a reward currency for dollars spent is not going to achieve against this goal ­ and deeper preference should be one of the primary aspirations for any loyalty program strategy. Because this isemotionally driven, that's where brands should start as part of the unlock. What do you know already about why you are preferred? What emotional need do you meet? Do you enhance a certain sense of self or personal expression? You need to understand how your brand identity supports your customers personal identity. Knowing why your customers connect with you emotionally will ensure your program structure and messaging reinforces this attachment.As the loyalty program owner there are many ways to uncover your customers emotional connection to the brand. Pay attention to your social sentiment. Approach your Customer Care partners and ask to listen in on calls or ask for access to their call logs. This experience will not only show the good but also unearth potential negative sentiments that you need to be aware of. Surveys are also extremely impactful in this regard. Providing an opportunity to customize the questionsto helpestablish the key emotional drivers.DISCOVERThe discovery process requires program owners to evaluate both internal and external data elements. A sample flow would be:· Meet with internal stakeholders (inclusive of Senior Leaders) to understand their specific goals and objectives and desired outcomes for the program ­ increase revenue, reduce cost to acquire, improve retention, reduce migration to lower value segments, improve NPS etc. This step is imperative to ensuring program design matches the goals of the organization· Work with Finance and CRM teams to understand current and past customer performance and KPIs. Capture metrics By Alisa Stewart, Sr. Director, Acquisition, CRM & Loyalty at Party CityIN MY OPINION
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