Whether your loyalty program has been in place for years or is recently up and running, you may notice unredeemed points, low participation, or inconsistencies in your data. These are some warning signs that your current loyalty program is costing you more than benefiting you. So, how do you get your loyalty program back on track?
A simple cost analysis can tell you, frankly, that your program is failing. But why? The answer can be much more complicated. Reasons may include: underestimating high value customers, too narrow of a points redemption period, complicated rules, or too little price differentiation.
Data is key to getting your loyalty program back on track.
But what’s the biggest reason your loyalty program is failing you? Not using your data.
Data is the driver behind a successful loyalty program. Customer insight can wholly benefit your business. It helps with informing inventory and pricing decisions and targeting high-value customers for reward opportunities. Tap into the wealth of customer data. Encourage return customers and increase dollar return.
According to GI Insight, 87% of consumers say that, where a company has a good loyalty program, they have continued purchasing from that brand over the last few years. Additionally, 33% have switched brands because the company they shifted their purchasing to had an appealing loyalty program.
Consider implementing a tiered program.
To optimize your program, rewards should be tiered. This ensures high-value customers are recognized differently than those of less value to your business. To successfully price differentiate, identify who is participating in your program and note their buying patterns. Digital customer profiles enable you to keep track of who is in the program and allow you to easily file and store their information.
Once you’ve targeted your key customers, use data to make sensible offerings that are most beneficial to you and the customer. Linking the customer to their purchase history will let you provide targeted product recommendations with adjusted prices. Go above and beyond by offering personalized products and services. You can also let your valued customers exclusively customize their reward packages.
Make informed decisions about inventory and pricing.
Additionally, the data of a smart loyalty program enables you to be more agile with your inventory and your price points. The ability to segment your customers provides you with valuable insights. These help you understand what each segment buys, how much they’re willing to spend, and how you can upsell and add on items that they actually want.
Beyond dollars and cents, there’s intrinsic benefit to having a fully functional loyalty program. Leverage the gold mine of data to optimize price differentiation and capture long-term customer relationships.