Everybody understands consumer loyalty programs and knows their value. Right?
Even though consumer loyalty is a top priority for retail — never more so than in the current period of rapid change and volatility — it’s becoming increasingly clear that many organizations remain wedded to outdated, limited or just plain mistaken ideas about how best to operate and enhance their loyalty programs.
Are These 5 Loyalty Myths Holding You Back?
Changing Expectations for Shoppers
Today’s consumers want their loyalty programs to offer:
Personalized, relevant promotions
And this mismatch between beliefs and reality means that many loyalty programs don’t achieve their organization’s goals, despite tons of investments in time, money and IT projects. Worse, these perceived challenges may keep many organizations from deploying their own loyalty programs, robbing them of an invaluable toolset for both acquiring and retaining consumers.
If these challenges are holding you back from making the most of your loyalty program, it’s time to pivot. Read on to learn five loyalty program myths, get the truths beyond the myths, and learn strategies and tools you can use to achieve lasting loyalty program success.
To enhance loyalty program performance, retailers must do a major rip-and-replace of their existing systems.
Forklift upgrades are expensive, disruptive and may be unnecessary. Savvy marketers should instead focus on a modular approach to leverage the capabilities of their current loyalty technology while adding new functionality with innovative complementary solutions.
for Exchange Solutions clients that leverage modular promotional solutions to enhance their existing loyalty platform.
of all sales captured are incremental
Source: Exchange Solutions
Modularity empowers retailers to fine-tune and enhance the output of their loyalty execution. Add-ons and integrations with modular tools help address the gaps in existing platforms.
These adjoining SaaS-based solutions, with their robust APIs and data flows, work in parallel with your current technology stack to engage members in a meaningful way.
A modular improvement approach is also more affordable and highly scalable. Modular tools deliver a faster positive ROI due to a laser focus on improving a few core competencies that positively affect engagement performance and promotional budget efficiency, rather than spreading larger investments across multiple areas of your loyalty program.
Modularity built alongside current solutions also delivers meaningful time savings. Instead of consuming days or months to compile information from disparate systems and push out a promotion, the right add-on technologies can trim execution time down to mere minutes. This helps create a revenue-generating, incremental impact on your business.
Reduce operational investment on execution and enable resources to do more on behalf of engaging the consumer
Yes, third-party cookies are on their way out. Fortunately, third-party data was never central to loyalty program efforts. Instead, zero-party and first-party data — information given directly to the retailer by the consumer or member— is far more valuable, meaningful and useful.
But though retailers recognize the tremendous value lurking in zero- and first-party data, few are actually putting it to use.
The coming disappearance of cookies and other tracking tools will cripple the majority of consumer loyalty efforts.
say the inability to act on buyer and consumer data will be one of their greatest challenges over the next 2 years.
marketing decision makers
1 in 5
Cookies have also become less relevant because consumers are more educated about their data privacy rights than ever before. They’re well aware of their online activities and protective of their information. This shift in thinking has chipped away at the cookie’s utility.
say they care about data privacy and want more control.
of people say
Loyalty programs are particularly insulated from the deprecation of the cookie. With a solid opt-in strategy, shoppers can give retailers the right to use their information in exchange for compelling offers and other perks. Zero- and first-party data delivers better consumer insights — it’s more accurate, current and actionable — and its quality and relevance outstrip anything offered by third parties.
Modern technologies have also facilitated a sea of change in how (and how quickly) retailers collect and analyze shopper data.
During consumer interactions
Through digitally promoted surveys
As part of the transaction process
Robust, modular tools allow for easy connects with data warehouses and the application of powerful analytics to optimize content and offers in real-time.
The more you know about your consumer— and the more quickly and easily you can action those insights — the more targeted and compelling each offer will be.
Retailers no longer have only a few partners to help them move their businesses forward. Instead, the sector is booming, and the right strategic partnerships can give your loyalty strategy a much-needed boost. By thinking outside the box and leveraging new collaborations, you’ll position your business to keep up with consumer expectations and stay ahead of the competition.
Only a limited sphere of partnerships is available for integration into a loyalty program structure.
Don’t limit your loyalty infrastructure collaborations to CRM partners, redemption partners and co-branded credit card financial partners. A broader approach to strategic partnerships widens your access to valuable SaaS app and data pools that are secure, compliant and perhaps already working for you in other areas of the business.
Data flowing into your loyalty program through ecommerce, POS and other partner systems is vital to informing offers. This data lets your team answer key questions to help shape your execution:
Is the consumer a serious buyer or are they still in the browsing phase?
A strong partnership strategy, particularly when partners are already part of your ecosystem, also takes advantage of existing integrations and reduces the time and effort needed for IT to build new connection points.
By working with a global operating system that enables payments anywhere and anytime like Carat from Fiserv, retailers can leverage their payment activity to augment their loyalty program with transactional data in a PCI-compliant way. You can gain important insight into your consumers’ physical locations, their spending habits, wallet share and other relevant behaviors to unlock new consumer experiences and drive higher ROI with your loyalty program.
For example, if wallet share data reveals that a consumer typically spends $500 on back-to-school shopping among multiple retailers, you can use that data to offer that consumer a discounted gift card to encourage them to do more back-to-school shopping at your location – providing more value to the shopper while growing consumer loyalty.
Using legacy systems and limited datasets to scale loyalty was indeed a complex chore. But today’s flexible SaaS offerings and the right partnerships empower retail marketers with the resources to seamlessly scale their loyalty programs across new markets, new channels and new consumer bases, while also keeping their existing consumer pool engaged in the right ways.
The addition of valuable data pools, along with tools that apply artificial intelligence (AI) and machine learning (ML) relevantly, enables you to engage members at scale without losing the one-to-one connection that’s so important for driving positive outcomes.
Personalizing loyalty programs with the right offer at the right time, via the right channel and aimed at the right member, is too complicated to do at scale.
Retailers no longer need to face the impossible task of matching thousands of manufacturers’ SKUs, discounts and other data elements on an individual basis to optimize spend. Modular, SaaS-based loyalty tools that employ AI/ML automates the process, executing offers to the ideal consumer that in turn delivers positive and incremental results.
But AI/ML does more than compile lots of data quickly. With careful modeling, the technology also discerns which information is most important.
You shouldn’t give someone a discount to do what they’re going to do anyway. Offers need to incentivize new behaviors and drive the outcomes you want.
Innovative tools can surface useful data and focus on getting the right offers in front of your consumers at scale. You can achieve incremental performance by zeroing in on exactly the data you need — every time.
It’s true that running even simple loyalty solutions used to consume a lot of labor hours. Many systems required program admin resources to define and push out new promotions, and it could take weeks or longer to action consumer data. Modern SaaS tools and data integrations changed all that.
Retailers need a large in-house staff to manage loyalty programs and measure their effectiveness accurately.
The blend of SaaS loyalty tools, user-friendly interfaces and value-added managed services is a force multiplier for in-house teams. Even junior-level resources should be able to easily review relevant insights, develop a promotion and execute it in just a few minutes. Today’s technologies streamline activities by doing much of the work for your stakeholders, rather than simply giving those resources more tools and expecting they’ll do the work themselves.
But your internal resources aren’t your team’s only source of expertise. Loyalty vendors have developed their own deep knowledge bases, and the value-added managed services offered by top-tier providers gives your team access to insights informed by years of experience.
Remember, too, that your loyalty vendor isn’t just there to show you ways to optimize your loyalty tools. They should also be available to help with strategic support and visionary planning, so your team can remain experts on your own business, rather than needing to be experts on both.
10X operational efficiency gains in promotion execution achieved by Harry Rosen using Exchange Solutions
Don’t let conventional thinking hold you back. It’s time to turn your loyalty program toward the future with important strategic partnerships, powerful integrations, valuable new data streams and cost-effective tools that complement your existing solutions.
Take Your Loyalty Program to the Next Level
Exchange Solutions offers comprehensive, full-featured and personalized solutions that let retailers turn their loyalty program data into action, all without needing a costly rip and replace. With advanced analytics, a two-decades-long track record of success and key market connections with global technology leaders such as Carat from Fiserv, Exchange Solutions is uniquely positioned to help your team drive incremental revenue, boost consumer retention, and scale your loyalty program for optimal results.
Exchange Solutions is a cloud-based marketing technology company that delivers personalized loyalty solutions to retailers enabling them to build deeper and more profitable engagement with their consumers. With more than 20 years of experience in the industry, Exchange Solutions transforms loyalty programs and promotions from being costly applications to productive and profitable capabilities for clients across various verticals in the US and Canada. Current clients include Esso™ and Mobil™, Rexall, Sobeys/Safeway, Lowe’s, Kent Building Supplies (a J.D. Irving company), Harry Rosen and INDOCHINO.
Retail TouchPoints and design:retail give all members of the retail world access to a vibrant community that combines insights, inspiration and opportunities to interact with their peers. We sit at the intersection of the art and science of retail strategy, providing granular data, high-value commentary, and aspirational success stories to help readers optimize customer experiences across all channels. Touching all facets of the retail ecosystem, including store experience and design, workforce management, digital marketing and engagement, and omnichannel optimization, our editorial content, multi-media resources and events take timely news and trends and transform them into tactical takeaways that meet the unique needs and priorities of our executive readers.
across the U.S. and UK plan to collaborate with other organizations to share first-party data.
Source: Winterberry Research
say they actively receive irrelevant offers.
generated by companies excelling at personalization vs. those with “average” personalization activities
Marketing teams’ biggest hurdles:
The latest generation of innovative solutions deliver valuable functionality:
User-friendly segment builders and Machine Learning recommendation for advanced promotion targeting
with maximized loyalty program performance.
Source: Exchange Solutions
lift in member spend
More personalized shopping experiences
80% of consumers are more likely to buy from a company that provides a tailored experience.
Have they looked at reviews and other user-generated content?
What other products
have they considered recently?
Where else are they shopping?
What are they not buying from you?
Are they likely to return the item they are buying?
Set-it-and-forget-it offer and campaign creation and execution
Packaged, real-time reports
Shape and deliver personalized offers
Action new, relevant offers more easily that create more engaging consumer experiences