Building Priceless Customer Loyalty with CDP
Loyalty programs have seen a significant shift in recent times. There has been an increase in customer’s expectations to be rewarded for their loyalty while at the same time, marketers have also realized the benefit of such programs on their bottom line. The technical capabilities of loyalty platforms have also improved. But building strong and tight connections with customers is not an easy task for any company. Brands inculcate financial benefits and social ties to ensure customer retention and loyalty. However, a successful loyalty program goes beyond just increasing basket value and number of visits, to make one’s customers — brand ambassadors. Jackie Huba and McConnell built a ladder that companies could use as steppingstones to build the objectives of their loyalty programs –
Customer Loyalty Ladder
Source: Wantedness Thought Leadership, PSB Researcher, Wunderman, 2017; From Word of Mouth to Customer Evangelism, AMA Marketing News, Jackie Huba, 2012
Loyalty programs, though beneficial in a world where products and services are getting less competitive, may do harm if not accurately positioned. At least 40% French shoppers claimed to have unsubscribed from loyalty programs after receiving too many mails.[1] Thus, it becomes imperative that companies design their loyalty programs in-line with the expectations of customers. A survey in 2016 reinforced the factors that influenced brand loyalty for US’ consumers[2] –
· 85% consumers stated that safeguard and protection of their personal information is an important factor for them
· 81% consumers stated that the company should be available when they need them but respect their privacy otherwise
Thus, it all boils down to the company’s usage and management of data to deliver hyper-personalized customer experience. But, collecting real-time data is easier said than done. Further, with the advent of GDPR, related privacy regulations and ban on third-party cookies, gathering digital data is also an issue, let alone integrating the same into the company’s CRM platforms. This makes engaging customers at the right time with the right message an expensive, time-taking and risky task. In such a scenario, Customer Data Platforms are uniquely positioned to build a unified customer view at reduced cost.
· Unification of Data Sources — Customer Data Platforms (CDP) collect data from multiple brand touchpoints under a unified governance approach. These customer data points which can be demographical, behavioral, CRM, campaign or web-browsing related are integrated into a single ID for designing the loyalty program. The data structured, semi-structured or unstructured data is collected in real-time and is cleaned and sorted in an automated process. The use of CDP also reduces administrative and auditing costs significantly. Any risk of data error or inconsistency associated with 3rd party data is mitigated. Customer Data Platforms also bridge the gap between process-specific applications, thus busting corporate silos and providing a flexible data management structure.
· Automation of a 360-degree customer view — Once the data collection is completed, Customer Data Platforms leverage AI/ML-based algorithms to build highly precise and refined micro-segments based on customer attributes. CDPs are fully integrated with the customer data sources, reducing the integration cost and deriving real-time insights. The loyalty funnel is created and managed in real-time suggesting brands the Next Best Action for every customer segment. Any requisite manual process is automated by Customer Data Platforms enabling marketers to concentrate on building personalized and effective marketing campaigns.
· Delivering hyper-personalized experience — The ideal marketing communication channel and loyalty program details specific to the various segments are identified by the Customer Data Platforms. CDPs analyze various success metrics such as conversion rates, click-through rates of the different programs. In a test-an-learn culture, AI/ML algorithms are then used to build a positive feedback loop to suggest redesigning of the loyalty programs.
90% marketers stated that the Customer Data Platforms have had some or significant improvement in their customer loyalty. The same survey also revealed that 92% marketers were also able to improve their customer lifetime value through the implementation of CDPs.[3] The pandemic has also increased the importance of CDPs as customers move towards more digital engagement, forcing marketers to re-think their marketing campaigns.
[1] https://www.criteo.com/fr/wp-content/uploads/sites/4/2020/02/Criteo-Shopper-Story-2020-FR.pdf
[2] Global Consumer Pulse Research: The Languages of Loyalty, 2016
[3] https://www.advertiserperceptions.com/report-cdps-coming-of-age/
