Category: Blog

Creating a Positive Customer Experience Amidst the COVID-19 Pandemic

During these unprecedented times, we are no longer able to rely on the in-store customer. The world is changing rapidly, and it is more important than ever to build and maintain customer loyalty. But how can you create a positive experience without customers in your store?

Mobile Responsive Webstore and Cart

Customers everywhere are having to shop online to remain safe and healthy, including those who have always preferred the in-store experience. 

We need to be asking ourselves the important questions:

  • Is our website accessible?
  • Do we have a webstore that is compatible on all devices?
  • Is our webstore linked on all our social channels?

Customers will spend locally if you make it easy to be found and easy to buy.  In fact, many customers prefer to support local businesses.  Reduce roadblocks for your customers by linking your web store to all social channels and make sure you are compatible for checkout on any device.

Give customers the option to order ahead

Do you have customers that don’t feel comfortable shopping in-store due to COVID-19? No problem, you can still earn their business.  Help customers feel safe by allowing them to order ahead through your webstore. 

Loyalty Enabled and Integrated Online Checkout

Do you have a loyalty and rewards program? If not, you may be greatly missing out.  Loyalty and rewards programs are one of the best ways to increase sales and retain customers.

Create incentives for customers to shop with you

If you are a direct-to-consumer business, you likely have already had to modify the way you do business to engage your customer. 

Provide incentive by giving your customer the opportunity to earn benefits just for shopping with you. By awarding your customers points on every sale you will build a positive customer relationship that lasts.

Reward your most loyal customers and entice your new or lapsed customers back to your webstore by offering special deals. Awarded coupons will increase both sales and customer loyalty.

360 view of the customer

Customers expect to receive the same reward benefits shopping online as they would in-store. To attain this, your customer profile database must be accessed through your webstore.

bLoyal is integrated with your webstore and your POS system so that you will have a single customer record across all sales channels. Customers’ online shopping will be tracked, and they will receive the desired rewards for choosing you over your competitors.

Customer Engagement

Are your customers aware of current promotions and sales?

Due to COVID-19 and the “new normal”, in-store promotions are no longer reliable in driving sales.

Communicating current sales and promotions with your customer base via text and email is more important than ever. Having one centralized customer database with purchase history across all channels allows you to easily segment your customer base for personalized communications.

Drive business and increase sales using the following strategies:

  • Email campaigns based on customer sales history.
  • Reach out to lapsed customers with appealing deals.
  • Offer specials for birthdays and anniversaries.

All of which are made possible by bLoyal’s automated customer engagement platform. We are here to help you save time while driving customers into your virtual store, building a loyalty that will keep them coming back. 

Communicate with customers without ending up in the spam folder

It is important to keep your customers informed with what is going on in your store without pestering them with unwanted texts and emails. You lose the opportunity to acquire business from promotions the moment the customer unsubscribes from your marketing emails. Reduce this risk by tailoring your communications with personalized promotions.

We understand the importance of offering the right customer, the right deal, at the right time

Segmenting your customer base with bLoyal’s platform allows you to perform targeted promotions to groups of customers. For example, customers who frequently purchase within a brand are far more likely to appreciate an email or text to notify them when that brand is on sale. This creates a positive customer experience that adds value to your customer.

It’s Not Too late!

Direct-to-consumer businesses that invest in their online experience are going to survive.  We are here to help. For more information on how bLoyal can help increase your customer lifetime value contact us at info@bloyal.com.

Winning Hospitality Loyalty - Preview Illustration

Winning Customer Loyalty in the Hospitality Business

Summary: As a hospitality program manager, you work hard to curate amazing guest experiences. And while a big part of that effort takes place within the context of your face-to-face interactions with them, that’s only part of the customer’s “journey” with your brand. Hospitality loyalty programs can help you close the loop on providing a review-worthy experience with your hospitality brand, from start to finish.

What do Hospitality Loyalty Programs Really Mean for You?

Part of any phenomenal guest experience is the magic that makes it all work. As hospitality program managers, anticipating our customers’ needs before even they have them, is important. We go the extra mile (if not several more) to make sure that guests want for nothing. And we create seamless interactions that leave the impression that each, of what could be hundreds or even thousands of customers, is the only one that matters to us in that exact moment.

Yet, we often have a difficult time translating that commitment to other aspects of our guests’ journey. We don’t leverage these experiences in driving new business. We sell significant aspects of the customer path-to-purchase off to the highest bidder. We don’t do a great job at understanding who our most valuable guests are, or what we can do to increase their ranks.

Many of us are looking to technology in order to help better understand and manage the guest experience in a way that mimics our general ethos, providing a seamless value-based experience over every platform, channel and device where they engage with us.  More than that, we’re looking to leverage each experience to help tell a story about what we value, and use it to drive repeat business.

A loyalty program may not be the first solution that pops into your head for meeting these goals, but there’s a lot to dig into here. In fact, more advanced loyalty and rewards software offers a lot of value by way of tools that can help you improve your overall guest experience, drive word of mouth, and make a significant impact on your bottom line.

Before You Get Started

If you’re new to loyalty and aren’t sure what this all means, you may want to check out our “Guide to Getting Started with Customer Loyalty”, first. This post is going to skip over loyalty program fundamentals and dig straight into how hospitality programs specifically can optimize customer retention and engagement with loyalty software. If you’re ‘old hat’, but are looking to upgrade your customer retention capabilities, you may want to take the strategies we’ve outlined here into account, as you move forward with figuring out your next steps.

Spreading the Word

Word-of-mouth is likely one of the most powerful components in your hospitality marketing toolkit. In fact, Hospitality.com stated referrals drove more than 40% of hotel reservations, worldwide in 2017. Our choice then isn’t between whether or not to focus on word-of-mouth, but how well we can leverage loyalty programs to help drive it?

Speech Bubble - Illustration

Build Reviews

Love ‘em or hate ‘em review aggregators like Trip Advisor, Yelp, Google Reviews, and others can have a big impact on your business. In addition to driving revenue, they’re valuable components of your SEO, PR, and PPC strategy. Using loyalty to drive reviews of your program with marketing automation

  • Solicit – “The answer to every question you don’t ask is “no”’. Garner reviews from your loyalty program members by sending an automated follow up email surveying various aspects of their experience. Offer additional loyalty program points for the customers that do.
  • Record – One of the great things about omnichannel loyalty software is that it allows you to maintain a single unified customer record, across touchpoints. Where possible, attach customer reviews to each members’ unique profile. This will give you insight as to how their experience has evolved and help your employees closely monitor future engagements.
  • Engage – The way you respond to a negative review often says as much about your business as having the review, in the first place. Leverage your rewards program to help offset negative experiences.

Get Social Shares

Social media is a powerful tool for earning word-of-mouth business. The average facebook user now has about 338 friends. How much would you pay to connect with each of these people?

Your program should offer rewards for sharing your experience on social with a check-in or other recommendation. Some mnichannel loyalty programs like bLoyal have tools to identify a guest by their social media handle. Track these mentions with almost any social media monitoring tools and apply discounts directly to the guests account based off of your branded hash or name tags.

 

Get Social Shares - Illustration

Leverage Brand Loyalists

We’ve talked quite a bit about how referral, or ambassador programs can drive revenue over the past couple of years. One of the most frequent questions we get, with regards to hospitality-based businesses (especially if they’re a larger spend, like a cruise or tourist destination) goes, as follows:

“Customers don’t visit me very often, but they spend a lot. How can I use loyalty to expand beyond my customer base when I may only transact with a specific guest once or twice per year.”

Ambassador programs are a great place to start. Past guests should be able to earn points and other rewards, based on the new business that they’re sending your way. If a guest who only does business with you, once yearly, recommends your cruise line to ten other people who subsequently purchase cruises, it would be well worth your time to offer them a steep reward, for doing so.

The end user isn’t always your target, though. In the case of a restaurant located in close proximity to a hotel, for instance, it may make more sense to offer rewards directly to concierges. If the concierge has directed ten families to your restaurant over the course of a night, it’s equally valuable to pay for their dinner.

Segmentation

One of the important lessons that retail businesses have learned in the last ten years is that you can learn a lot about a customer by what they purchase. Using purchase-level segmentation build into most integrated loyalty systems helps you build more relevant content. What does this have to do with spreading the word about your loyalty program? More relevant messaging means that guests are more likely to pay attention to and share your content. The more attention they pay to you, the more likely you are to be top-of-mind when friends ask for recommendations.

Rethink Rewards

On the whole, the average hospitality rewards setup is pretty basic. They tend to run a bit like a frequent buyer programs; you stay, dine, or book a certain number of times, earning “X” in the process. Many programs never move beyond that model, however. Omnichannel rewards have come a long way, and most hospitality-based customer retention strategies leave quite a bit of money on the table, in terms of opportunities to use their loyalty program in driving the bottom line.

Here are some suggestions for using your loyalty program to get a leg up:

Winning the Affiliate Game

The website Static Brain says that 57% of hospitality based reservations, across verticals, are now made online. An increasing share of that traffic is happening through affiliates like Expedia, Kayak, or Travelocity. And with good reason. These sites offer major discount to customers. But that occupancy often comes at the expense of loyalty to your brand. While you may be filling in vacancies, profit margin shrinks and your guest’s allegiance transfers from you to the affiliate, in the process.

This isn’t exclusive to the likes of hotels and car rental agencies, though. Many restaurants and smaller independent businesses face a similar dilemma. With sites such as Yelp, Bite Squad, and Open Table, getting thousands of reservations every hour, they become a major onramp for new and returning guests. As a hospitality program manager, you already know that.

Whatever the case, you don’t want to sacrifice your value proposition, but you need to both leverage and compete with these sites on a value-added basis, in order to get the best of both worlds. The most pertinent question is “What does a customer have to gain by reserving or purchasing directly through you?”

Point Multipliers

Offering a simple point multiplier is a great place to start when addressing ways to get a leg up on affiliate programs. Without the profit cut by third-party partners, you have more margin to work with and giving clients who book through you added points for doing so, can make a big difference in your bottom line. Split the difference with a point multiplier that will keep members coming back to your brand, vs outside discount sites.

VIP program Access

Your VIP programs can be especially important for hospitality-based programs and it’s something that affiliates don’t have much access to. Be careful not to turn your VIP program into a simple

Hand Holding VIP Ticket - Illustration

“Buy 10 get 1 Free”, though. Many affiliates offer similar programs and merchants should offer an incentive that third-party companies  can’t possibly compete with. For example:

  1. No cost cancellations, instant check-in, reserved seating.

  2. If you’re a business that has premium upgrades, leverage them as awards for clients who faithfully engage your program at the local level.
  3. Use other hospitality industry partnership to increase your loyalty program value proposition.

 

 

Drive Add-Ons

Add-ons are an important part of your hospitality business – whether it’s a day at the spa or a high-end bottle of wine. Use your loyalty program to introduce premium products by rewarding members with additional % off discounts on sister products.

For example, if your hotel has a spa, leverage the points earned during the booking process, towards a reward that offers a free seaweed wrap. If completed, you’ve used your rewards to introduce customers to a new product or service and provided additional value to the guest, that will keep them coming back.

Go Omnichannel

One of the most important ways that hospitality managers need to rethink the way they use awards programs to drive business, is how they are accessed. Many of the affiliate programs we previously spoke about are winning over customers, based simply on the fact that they’re accessible over all the devices where customers now spend time.

Building an omnichannel loyalty program, isn’t as difficult or expensive as it once was. Many cloud-based programs integrate (either through custom development or pre-built integration) directly with the most popular hospitality, food-service, and entertainment-based checkout solutions.

Omnichannel Loyalty - Illustration

Grow Your “VIP” offerings

Recognizing your most frequent (and valuable) guests is important. They spend more, visit with greater frequency, and talk your business up to their friends. Integrated omnichannel loyalty provides us lots of new tools for expanding your programs and controlling the guest experience, from beginning to end.

Tiered VIP

On a recent SlideShare presentation, the bLoyal team talked about tiered offerings and how they can drive more loyal customers. Tiered programs provide guests with increasingly more valuable rewards based on how often they performs a desired action. The more, visits, spends, or referrals the guest has, the greater the value of their program.

In order to stay in this tier, the guest must continually meet a defined goal. This drives personal investment for those who want to get the best benefits.

Subscription Models

You may not think of a service like “Post Mates” as a hospitality based business. Yet they essentially provide a concierge style experience for your home. Several months ago, Post Mates launched a subscription model, in which they charged top users a monthly subscription fee for unlimited uses.

Hospitality loyalty programs can leverage these unique tools to drive subscription revenues with special offers for their most regular guests, including business travelers, neighborhood residents, and more.

 

Other Hospitality Loyalty Program Ideas

Looking for other great loyalty program ideas for your establishment or hospitality business?

  • Restaurants can create locals-only discount programs to drive their base diners.
  • Taxi services can create awards for booking airport runs with them.
  • Multi-unit hotels, motels, and lodges can build awards around local attractions
  • Wineries and Breweries can create club based wine or beer “of the month” clubs
  • Theme parks can award points based on awards and social mentions
  • Cruise lines can provide exclusive perks for loyalty program members

If you’re looking to build an incredible hospitality loyalty program that generates repeat business with increased word of mouth, bLoyal can offer you a place to start. Learn more by requesting a free demo, above, or contact us at sales@bloyal.com.

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Winning Micro-Moments with Loyalty Preview Illustration

Using Micro-Moments to Win at Loyalty Marketing

Summary: As consumers turn to mobile to solve their everyday needs, it’s important for loyalty program managers to understand the concept of micro-moments and how the same philosophies should be guiding their loyalty program growth.

Last month, as my in-laws were arriving for the holidays, I embarked on an important journey. Our two-year-old terrier, Lucy, decided that it was a great time for a bath in the mud and I needed to get her cleaned up before the family arrived. Though I had seen dozens (maybe hundreds) of ads for pet care services near me over the last year, like many of us, I instead turned to my phone and searched “dog grooming”.

Within just a couple of seconds I found a mobile service that was able to come directly to the house and take care of the dirty work (pun intended), all while I was checking emails comfortably in front of the fireplace. Problem solved. The company did an amazing job and we had a great, if not substantially cleaner, visit with the family.

As a marketer, that was just the beginning of my story, though. The experience highlighted a trend that’s been changing the face of brick and mortar for better than ten years now. The path customers take to your front door has changed. Where we once understood the buyer’s journey to consist primarily of a series of touch points that created brand familiarity leading up to a ‘zero moment of truth’, customers now pay less attention to the familiar and more to the immediate.

Where we may have once simply Googled our favorite brand (whose website offered a wealth of expertise on our needs, and in turn, products to solve those needs), we now turn to our favorite mobile devices for contextual answers to these questions. In fact, over 50% of all searches in the last year were conducted on mobile devices, and that number is growing quickly.

What are Micro-Moments?

In 2015, Google laid out the case for this phenomenon and how we can better understand it in a white paper entitled “Micromoments – Your Guide to Winning the Shift to Mobile”. Inside, the company described four critical instances in which consumers turned to their mobile devices in order to make a purchasing decision, and where merchants had a chance to extend their influence about those choices.

  1. I want to know
  2. I want to go
  3. I want to do
  4. I want to buy

These are the moments in which customers want to be marketed to. They are actively looking for a product or a service and, more importantly, are looking to hear how you can best fulfill their needs.

Illustration of all the things we do on our mobile devices

The Loyalty Connection

If a customer’s loyalty now rests solely on which company can most quickly, easily, or inexpensively fill a customer’s need, how do loyalty programs fit in?” “How does my loyalty program work to disrupt the buying process and help me earn and retain new customers.”

To start, mobile has created a seismic shift in what we think of as brand loyalty. Recognition is still a very important aspect to building trust but has ceded its relevance to the immediate – the now. Customers may not be visiting brick and mortar stores as much as they used to, but when they do, they are buying more, in less time. They come informed and know exactly what they’re looking for.

In addition, they may use your brick and mortar store, simply as a showroom and proceed to order products directly off their mobile device. Alternatively, they may order online and pick up their goods directly at your store. In turn, the latest strategies have begun to evolve past the notion of multiple store fronts into the seamless integration of the mobile and application based online and instore experiences as one brand experience.

This is where your loyalty software will help you get the jump on how and where customers engage with your brand.

Optimizing Your Loyalty Program with Micro-Moments

The first thing you should know about micro-moments and customer loyalty, are that opportunities abound. There are many great posts, from very high-level SEO’s about how you can optimize your web presence for micro-moments, but few to none of them address how we can leverage these same insights to drive membership and engagement in our loyalty programs with mobile devices.

In the same Google white paper, the author establishes three rules of thumb for optimizing the mobile marketing experience: Be there. Be Useful. Be Quick. The same rules can (and should) guide your loyalty marketing strategy program.

Be There

The intrinsic value of a loyalty program is that you get a jump start on your customer’s buying process. You get to cut the line in your customer’s mind about the best options for accomplishing any given task. They know that they’re going to benefit from their relationship with your business, and that preempts the search process. Micro-moments and customer loyalty isn’t merely a theoretical discussion, however.

Mobile Optimized

It’s incredibly important that when customers turn to your loyalty program, it be optimized for the mobile experience. This includes everything from the shopping experience to account access. It should be easy for the customer to understand how your program benefits them, over any device.

The Loyalty Funnel

Loyalty shouldn’t be an afterthought on your website. Introduce your loyalty program early in the customer’s journey and leverage the customer immediate interest in your products to add them to your program data base. This means that customers who find your site over mobile will often first add themselves to your loyalty program and then make a purchase.

Be Useful

The idea of being useful is key to a successful loyalty marketing strategy. By definition, the efficacy of your program will only be as strong as it is easy for and relevant to the person you’re talking to.

Integrated

Customers shopping your program over mobile will be particularly sensitive to getting passed from site to site. Your loyalty program UI should come up directly in-flow of each transaction. Each transaction should pass from your site or application, directly into your database, quickly. Customers should resolve to a single record and benefits should be applied to all loyalty program channels, automatically.

Product Level Segmentation

Don’t spam your customers with irrelevant offers on products that they don’t need and won’t engage with. This is where product level segmentation really comes into focus. Rion Haber, of the integrated marketing agency 1205 Marketing says,  “By understanding which products your customers are buying you can more effectively target them with products that are useful to them.”

Be Quick

We live in an increasingly time-sensitive world and our tolerance for not getting the information we want, went we want it, is extremely low. One of the most important aspects of applying the micro-moments ethos to your loyalty campaigns is speed. In a recent survey, Google found that Customer’s would only wait about three seconds for a website to load. The same goes for interacting with your loyalty program.

Real Time

Customers should be able to see, earn, and utilize their benefits in real time, over any channel. This goes beyond benefits though. Dynamic customer resolution ensures that shoppers who create an account in one place can access your program in another, by resolving customer records automatically.

Instant Rewards

For potential customers who do engage your funnel, instant rewards can be one of the most powerful tools in converting shoppers to buyers. bLoyal’s data shows that customer’s who receive instant rewards churn up to 60% less often and make an immediate purchase up to 50% more often.

Illustration of Google Micro-Moments Key Components - Be There, Be Useful, Be Quick

The Impact

The shift to the online ecosystem isn’t new. Neither is our understanding of its importance. The move to mobile however, is a gamechanger, even within the eCommerce ecosystem, itself. Furthermore, our ability to grasp exactly how the increase in mobile traffic impacts the customer’s path to purchase is just beginning to come into focus.

Applying the marketing strategy that micro-moments are built on can help make sure that your loyaly program is ready for the new mobile shopping experience as it grows larger. For more information on any of the strategies in this post, please contact us at sales@bloyal.com and we’d be happy to help get you there.

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Connecting Your Point of Sale and eCommerce Preview Illustration

Connecting Your POS and eCommerce Solutions

If you’re a brick and mortar retailer who’s just getting online (or maybe the other way around), you’re probably looking to connect your point of sale and eCommerce systems. Piece of cake, right? If we can put a man on the moon, this should be a breeze. The answer, as it often turns out with disparate technologies, is that it’s simple, but not very easy.

Your basic goal in connecting these touchpoints is usually three-fold:

  1. I want to create a single inventory that syncs products automatically between various touchpoints.
  2. I want to create a single transaction history, so I don’t have to keep two sets of books.
  3. I want to create a single customer record that tracks purchase history across all the places that I do business.

It even sounds relieving; the seamless integration of two technologies working in perfect harmony to amplify the power of your time. Indeed, there are many companies looking at ways to crack this egg.

Fortunately, you do have some functional solutions.

A Quick Technology Primer

For any two checkout solutions to accomplish these goals, they must effectively do one of the following two things:

  1. Both Systems Speak the Same Language
  2. Both Systems Speak Each Other’s Language
  3. Both Systems Speak through a Third-Party Interpreter

 

While different companies have taken different approaches to solving this problem, each solution effectively presents its own set of opportunities and complications. Here’s a brief look at all three, and how they work.

All-In-One eCommerce and Point of Sale

All-in-one POS and eCommerce solutions utilize a shared back-end code to surface products, carts, and checkout flows instore and online. They may display them a little differently in each place, but they draw from the same data base. This means that your data, sales history, and customer records are all stored in the same place and are accessible across platforms.

Shopify is a great example of an all-in-one solution.  Big Commerce, Vend, and Bindo all offer similar products, as well. With these solutions, you manage your store from one central location and both checkout solutions are updated, in the process.

Because these systems tends to focus on small businesses however, many of the tools that you might find built into a mid-market or enterprise setup aren’t natively present on your machine. At this year’s NRF Conference we saw a lot of interest in scaling this model but believe that it will be another five years before there’s a truly viable product.

Connected Point of Sale and eCommerce

To have used these two systems at a management level is to understand how complicated each can be unto itself. Integrating two technologies that were designed to work in a stand-alone environment and getting them to speak to each other can be a difficult problem to solve.

Yet, various eCommerce companies are taking the next step in developing these technologies, using open API’s. As we move towards a more digital world it’s become impossible for brick and mortar POS solutions to simply ignore eCommerce and it’s virtually impossible to find a current solution without at least one pre-integrated online buying solution.

Custom integrations are a viable option here, but they can get pricey for small business and mid-market companies that don’t have internal development and testing resources.

Connecting Your POS and eCommerce - Connected Systems IllustrationThird Party PoS and eCommerce Integrations

There are several third-party softwares that offer to bridge the gap between your existing point of sale and eCommerce solutions. These are most often surfaced through cloud-based omnichannel loyalty programs like bLoyal, which use a CRM style interface to normalize data coming in from each touchpoint.

Integrated loyalty programs create a common point of connection between your POS and eCommerce solutions, synching inventory between the two systems, individually, and centralizing customer records and transaction history in the software’s native CRM. A value-added benefit to these programs is that they focus on leveraging this centralized data, to provide increased consumer engagement and retention, over both platforms through various onboard marketing tools.

Some third-party integrated connectors have another valuable use. Say that you want to add a native application to your shopping experience, for instance: Because the core value proposition of these apps lies in their ability to speak many different languages, they can effectively leverage tools like SDK’s to ensure that anywhere customers engage your brand, you’re able to provide a seamless shopping experience.

Remember that there are hundreds, if not thousands, of POS and eCommerce software solutions. Some loyalty software doesn’t integrate at all and no company has an out-of-the-box integration to every system on the market. Be careful to check that your third-party platform integrates with your existing solutions or offers a custom integration service.

Connecting your Point of Sale and eCommerce solutions can be tricky. No matter how you go about it however, there’s no denying that this type of seamless experience is what customer’s now demand from your brand. If you need help understanding which is right for your business, please contact our sales team for more information.

 

Frequent Buyer Program - Illustrated hands Exchanging Frequent Buyer Card for Gift - Hero

14 Ways to Supercharge Your Frequent Buyer Programs

Tips for Building a Frequent Buyer Program

Summary: Frequent buyer programs, are some of the most commonly recognized customer retention strategies for most businesses. Yet many organizations don’t utilize them to their fullest potential. In this post, learn how to maximize the return on investment with proven strategies for growing your frequent buyer programs.

Getting Started

On their face, frequent buyer programs are pretty easy to understand. Whether you’re talking about the ubiquitous coffee card or gas station fill-up clubs, program members are awarded y, after x number of purchases or visits. These programs are about two things, increasing frequency and decreasing churn.

As technology has progressed however, these special loyalty programs have added a lot of horse power, that in many cases, goes unrealized. For example: Merchants can now use conditional logic to build multiphasic programs. Tiered memberships can add an element of gamification into your program that boosts engagement. Social media can be leveraged to increase penetration and build revenue.

When implemented correctly, frequent buyer programs sing, and can be used for everything from driving regular donations to your local non-profit to building large multi-brand crossover campaigns. Yet most programs still adopt a simple “Buy ten, get one free” approach that leaves millions of dollars on the table, every year.

Goals of a Successful Frequent Buyer Program

Aside from the obvious goal of making more money, there are some basic goals, specific to your frequent buyer program, that can act as bellwethers of its success.

Increase Penetration

Like our overarching loyalty program, we want to get as many of our existing shoppers using our program, as possible.

Increase Breakage

“Breakage”, or the percentage of discounts awarded, measures the number of coupons utilized when compared to the number awarded.

Increase Average Order Value

If we’re going to be giving something away at the end of this process, we want to make sure we make it worth it. That means cranking up the amount each customer spends per award given.

14 Ways to Supercharge Your Frequent Buyer Program

For the sake of clarity in this post, we’ve used the phrase “punch” to represent a visit or purchase of a product – as in a “punch card”

Leveraging Sunk Cost

You’ve probably noticed that it gets easier to complete a task, the further along you are. You’ve cleaned half of the house and are pretty invested. You might as well push through and clean the other half, right? As counter-intuitive as it sounds, one of the thorniest challenges you’ll face with frequent buyer programs is getting people to the reward portion of their investment.

Capitalize on this most dependable of human behavior patterns by starting new customers off with a couple of punches to get going. Studies show that customer who were started with at least 30% of the goal completed, finished the task up to 50% more of the time.

Omnichannel Devices

Go Omnichannel

48% of loyalty program members say that their discounts expire before they can use them. While this may seem like a bonus for you, it produces exactly the opposite of what you’re trying to accomplish. You want someone to have the experience of being rewarded for shopping with you.

One of the best ways to do this is to make your frequent buyer program more accessible. Digitizing your punch cards through an app or other service is one of the best ways to do this, but you want to make sure that customers receive a punch, whether they shop in-store, online, or through a mobile device.

Provide a Carrot

We all love a little encouragement. Following up on the importance of leveraging sunk cost and understanding why breakage is important to your frequent buyer program. If your customer goes dormant for specific period of time, program an automated message letting them know how close they are to completing your task. Remember that breakage is critically important.

 

Using Carrots to Reward Customers

Create Punch Multipliers

Have a particularly competitive time of year? Celebrating a special occasion? Let customers know that they have a limited time to multiply the number of punches they’ll receive, based on their usual order. These can be particularly effective motivator around the holidays. You want to reach people at the zero moment of truth, when they’re just realizing they need your products.

Create Tiers

A customer gets to the end of your frequent buyer journey – then what? You could hand them a new ‘card’ and say, “start again”. Or you could up the ante with a tiered program. As your customers completes each phase, they ‘earn’ membership in the next tier. That is, when a new shopper has completed their first journey and graduate to the next level, they earn a larger reward for completing your goal.

This, again, leverages sunk cost. If someone has worked for months to get to a ‘gold level’ discount program, they are less likely to lapse out of that program.

Leverage product combinations

There’s no rule saying that frequent buyer programs must involve only a single item. For instance, “Buy 10 coffees, get 1 free”. Try using your program to grow your average order value by increasing the number of products in a single purchase.

For instance, if a cup of soup costs sells for $5 and you get the 10th soup free, you’ve earned $45. If a soup and sandwich or soup and salad combo sells for $10, and you get the 10th combo for free, you’ve made $90 in the same span of time.

Get Creative

A key tenant of a great frequent buyer program is that it’s fun and memorable. We want to create a sense of discovery here. While the traditional frequent buyer experience involves a pretty rote punch card system in which the buyer gets a check mark for each additional purchase, there’s many ways to get members more engaged.

  1. Humans, as a rule, like to collect things. Instead of punches, give members a new character or badge to collect each time they visit.
  2. Instead of punches, reveal a new piece of the puzzle, when customers make a purchase. You can do this through digital or physical scratch cards.
  3. Everyone loves being at the top of their game. Create a leader board and base your rewards off where customers stand.

Varying types of illustrated badges

Make it Visible

It’s very important to goal completion that customers be able to check their progress in your program’s journey. Most loyalty programs will offer some form of account page, where customers can login. If shoppers are accessing your frequent buyer program through an app, you can build a page right in through a loyalty-based SDK. If you’re loyalty program is restricted to a brick and mortar location, you can even create physical boards with each customer’s name and the number of actions they’ve taken.

Gamify

Gamification, one of the hottest trends in digital design and development right now. But don’t let that fool you. The same concepts can be applied virtually anywhere. In fact, you may remember one of the most successful frequent buyer programs in history – McDonald’s partnership with Parker Brothers’ Monopoly franchise. The program has been running for over two decades.

If you’ve never played, visitors are awarded properties for each item they purchased. When diners completed various “Monopolies” within the board they could win various free items. If you managed to complete the whole board, the prize was one million dollars.

Of course, you don’t need to have a million dollars in the bank to roll out successful gamification principals. In Betaout.com’s blog on the subject, the author says “The real value [of gamification] is in engaging and motivating your users at a deeper level.  Your game design should be based on your user’s journey.” The same applies to your frequent buyer programs:

  1. Build a story around your customers’ progression through your frequent buyer program.
  2. Award them at various stages along their journey to maintain interest.
  3. Create a ‘holy grail’ reward, to keep them coming back.

Short Term Frequent Buyer Programs

Looking to increase your share of shoppers’ holiday budgets? Short term frequent buyer programs could be a great strategy. Build a holiday themed campaign using seasonal punches instead of your normal punches. Give your shoppers a punch for each holiday themed item they purchase. Create a limited time offer with special holiday themed awards.

Don’t stop at the holidays though. Limited run products like wine and beer vintages, new product lines, and accessories make for great frequent buyer programs.

Cross-Promotional Frequent Buyer Programs

Shoppers are fickle and will sometimes go to several different merchants to purchase items that they could easily get at your store in one trip. Frequent buyer programs can be leveraged to encourage shoppers who normally remain in a single lane to branch out or to

Cross Departmental

If you’re looking to break people into your wider selection of offerings, you can encourage them to join departmentally based programs that award them for purchasing a certain number of items from each category in your inventory.

Segmented

Alternatively, create a segmented program that focuses in on selling products in a specific category. For example, if you sell clothing, create a children’s specific frequent buyer program. Social media advertising can be a great way to get you started off. Simply target against users who already like your page, but also have shown interest in children’s apparel.

Work with a Partner

Work with a vendor to sponsor a branded frequent buyer program. We’ve seen these programs work well in a number of different verticals, including hair and skin care, pet supplies (especially food), CPG, and more.

Manufacturers specifically, know that they’re competing against various other products and brands you carry. Creating a sponsored program gives your partner access to your customers and a leg up on the competition.

Utilize Social

Word-of-mouth is widely believed to be the ultimate form of promotion. A completely uninfluenced act of evangelism by a neutral source, based solely on their real-world experience with a product or brand. It begs the question, “how can I use word-of-mouth” to grow the adoption rate of my frequent buyer programs?”.

The answer is, that if we can’t pay for it, we can at least promote it. And social media is a great place to start. Similar to loyalty programs, at large, you want to try to give happy shoppers every opportunity to spread the word about your business. The best time to do this, is often after they’ve completed each phase and have earned a reward.

  • Give shoppers a head start on their next cycle, by awarding ‘bonus punches’ for sharing their reward on the previous cycle.
  • If members are earning punches digitally, program a “share on social” pop up.
  • Multiply the value of their next reward for sharing an image or video with the award.

Frequent buyer programs are just one in a spectrum of customer retention strategies that can help increase traffic to your business, whether that be online or in-store. For more information on how bLoyal can help you drive customer lifetime value with omnichannel loyalty and rewards software, click the “Request a Demo” button above, contact us with additional question.

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Holiday Loyalty Program Checklist - Preview

Holiday Loyalty Program Checklist

Break out the eggnog and mistletoe, it’s that time of year again. Retailers around the country are scaling up for the holiday season and between hiring temporary help and adjusting your inventory, it’s a great time to begin thinking about how you can leverage your loyalty program to increase seasonal traffic and vice versa. In this post, learn about some of the best ways to plot and build the ultimate holiday loyalty program.

Before we get started, there are some important considerations to keep in mind as you go about figuring out which strategies are right for you. To start, there are three things you can set your watch by: Potential customers are looking for the best deals. Holiday shoppers are very short on time and attention. And there is going to be LOTS of competition for your products and services.

That said, it’s not all bad news. Shoppers are also far more open to engaging new or unfamiliar brands during this time of year. The holiday season generally yields uncommonly high foot (and click) traffic. And finally, there are a long list of ways that you can use your loyalty program to capture shoppers far beyond the end of your fiscal year.

In order to get the most out of your holiday loyalty campaigns, you’ll want to start with a plan that includes goals, methods, and metrics. You want to drive revenues, but don’t want to do it at the cost of annihilating your bottom line.

Most organization will do fine with this three-fold approach to measuring loyalty program KPIs during this period:

  • Measure the rate at which you were you able recoup the value of applied holiday discounts by getting something in return – ie. new program members. Compare the customer lifetime value of the members you gain over the holidays with the amount you spent in marketing based discounts.
  • Ensure that you retain customers beyond the holiday shopping season. What percentage of the customers that shopped with you over the holidays return within 90 days?
  • Understand how you can use seasonal data to drive YOY seasonal growth. Which marketing efforts showed the best return on investment?

Now that you understand what customers are looking for from your holiday loyalty program and what to measure, let’s get started on building it!

Instant Join Rewards

The sheer increase in traffic most stores see over the holiday season means that you’re going to be seeing a lot of new faces: We want to capitalize on these opportunities by onboarding as many of them as we can into your loyalty program. One of the smartest strategies for incentivizing new membership (all year long) is the application of instant rewards to a customer’s account, simply for signing up.

While customers can use these discounts immediately, it also means that you’ve gotten them to take the first (and very often, most difficult) step in converting them to into a loyal customer – using their benefits for the first time. One in three customers end up using benefits on additional items, versus discounting their current order, amplifying your average order value and giving you an overall larger share of their holiday purchasing budget.

Loss Leaders and Points Multipliers

Most stores tends to have some holiday “loss leaders” – less profitable items that drive traffic, but don’t necessarily pay the bills. As the pressure to stay competitive with similar businesses increases over the last couple of months of the year, progressively deeper discounts inevitably follow. Staying competitive in this model means an uncomfortable game of ‘chicken’, wherein the lowest bidder gains share, but at what cost?

Points programs use a value-added approach to keep you out of the red by leveraging incentives to stay competitive instead of unsustainably discounted products. In short, you can not only get the customer, but you can keep them coming back over a longer period of time.

There are an almost infinite number of ways to tackle this problem, but point and loyalty dollar multipliers are a great place to start.

Idea: Holiday Giving Multipliers – Get in on the holiday spirit by rewarding customers who are purchasing products for holiday giving with double or even triple points.

Social Media Advertising

Overall, social media activity increases by about 26% during the holidays: When you consider Facebook’s almost 1.7 billion users, that’s a lot of eye balls. The holidays are a great time to engage customers with content relating to your loyalty and club program benefits.

Don’t forget to activate both existing club members with list based social media remarketing and potential new members with “boosted posts” and the like. Tie both back to incentives for added signup benefits like point and loyalty dollar multipliers.

Here’s some smart targeting ideas to get the most from your advertising dollar:

  • Target customers who have purchased from you in the past, but are not yet part of your loyalty program to pick off some low hanging fruit.
  • Use Facebook’s pixel snippet to track loyalty program signups, instead of just measuring online purchases. Remember that the customer path to purchase is not always a straight line. Shoppers may join your program and come back at a later date.
  • Build custom “look-a-like” audiences based on your existing subscriber list to help reach people who have similar shopper profiles and purchasing behavior as current members.

Merchandising

How are you informing shoppers about what they have to gain from joining your loyalty program? Are you waiting until the point of purchase or are you letting people know, as they shop? Loyalty program merchandising can have an incredibly potent effect in influencing which products your customers select and help increase average order value throughout the holiday season.

Whether you’re online or instore, let people know that they can get great deals by joining your loyalty program. This can come from in-store counter-top display, as well as UI on your website including banners, pop-ups, and opt-ins.

Ambassador Programs

Virtually anyone can become an ambassador for your loyalty program through email, social media, or text. This can become a particularly effective strategy during the holiday season as it provides a quick and easy way for you to get the word out about your holiday promotions and for shoppers to earn steep discounts.

Strategically speaking, there are a number of great reason to invest in long term affiliate programs:

  • Whatever you give away in discounts, will be offset by free word-of-mouth marketing you’ll receive.
  • Brand ambassadors who share your program in this way tend to be social influencers, meaning that the opinion they maintain about products and services, holds more weight that your average customer.
  • Ambassador programs have the dual effect of building brand recognition and driving the bottom line. Even if a potential new customer doesn’t visit you right away, a recommendation from from a trusted source lingers for a very long time.

 

Holiday Landing Page

Use limited-time holiday themed landing pages to build loyalty program membership during this period. The page itself may differ from your normal landing pages in that it features a festive design. However, it should also contain exclusive holiday-based rewards for new members who sign up during this time of year. This may include special discounts or incentives like “free holiday shipping” on orders that meet a certain threshold.

Be sure to add these pages to your marketing calendar for social media, but if you want to give your program an extra boost, we recommend adding “Promotion Extensions” to your existing Google Ad Words campaigns. Promotion Extensions are highly clickable and tend to convert at a significantly higher rate due to their unique look with in SERPs.

Holiday Loyalty Program Remarketing

The holidays are likely one of the most highly trafficked times of year for your business, whether online or at your brick and mortar locations. Customers are actively shopping available discounts and competition can be fierce. They want to find the best deals, in just the right color, shape, and size.

Competition for these customers is high, which means that you’re probably driving traffic from some unusual sources. Remarketing to customers who have viewed particular pages on your website isn’t unusual. During the holidays, we would suggest replacing your existing ads with ones advertising a special holiday discount when these products are purchased through your seasonal loyalty program.

For instance:

Members who might never otherwise buy a children’s product are now purchasing gifts for their nieces and nephews, students, or to give away as donations. While you don’t want to market to these customers all year long, a seasonal remarketing campaign could push them to buy from you when they have other events, such as baby showers, birthdays, and graduations.

Give All Year Long

For those with seasonal or rotating products, use your loyalty program to build monthly subscription programs that last all year long. Wine and beer clubs are an excellent example here, but subscriptions can also be used in most aspects of entertainment, including movie theaters, cigar clubs, game halls, cannabis dispensaries, airlines, gun clubs, etc.

Get Your Game On

Gamification is one of the hottest marketing trends of the past couple of years. That popularity can be leveraged for seasonal competitions and in-app purchases. Either way, building gamification elements into your website can yield the same incredible results. If you already have an app, but haven’t built loyalty programs in yet, check out the bLoyal SDK to get going.

Here are some fun ways to build gamification into your seasonal loyalty program:

  • Provide fun holiday-themed badges for people who purchase items in each of departments.
  • Give instant rewards for loyalty program members who reach a certain spending threshold
  • Build holiday themed club levels, such as “Grinch”, “Frosty”, and “Santa”. (Hint: No one wants to be a Grinch)

The Gift of Loyalty Giving

Gift card giving skyrockets during the holidays. Preload points onto loyalty enabled gift cards so that the recipient is encouraged to join your program on their first visit. Creating card envelopes that explain your card’s added benefit can be a great built in marketing tool.

Reporting

One of the most important actions you can take to continue growing holiday traffic is to better understand what’s driving it. This is important for the long term, but real-time insights can help you make iterative changes, as well. If you want actionable insight from the top of your holiday funnel all the way down to the point of sale, try integrating with data visualization and business intelligence tools such as power BI, to tell better stories about how these programs are driving your fourth quarter revenues.

Delayed Discounts

As the holiday season draws to a close, you’re likely bracing for the upcoming winter months and a significant decrease in traffic to your stores. While business is strong, try offering point and dollar value multipliers that mature after the first of the year and are only good for a limited period of time.

These can have a valuable impact in getting your sales moving again after the post holiday slow-down.

If you’re looking to build omnichannel loyalty marketing into your business, we can help. To schedule a bLoyal demo, simple request one at the top of this page. If you’d like to reach one of our team, you can email us directly at sales@bloyal.com

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Customer Path to Purchase and Loyalty

Customer Loyalty and the Path to Purchase

Summary: The term “path to purchase” refers to a set of experiences a shopper has with your brand leading up to the moment they decide to buy from you. Loyalty programs have the power to fundamentally alter that path by leveraging visibility into your customer’s purchase history, and shopping behaviors to build highly relevant content.

This is the first post in a three-part series about how loyalty marketing strategies influence your customer’s journey and help grow the bottom line.

Defining the Path to Purchase

When you select a product or service, it’s tempting to think that you’ve come to the decision, completely of your own volition. In reality however, you’ve likely had hundreds, if not thousands, of experiences along your journey that helped inform or guide your choices.

From television, radio, and newspaper advertisements, to emails, social media engagements, and even word of mouth from friends. Each experience with a brand informs an opinion of it which influences your future purchasing decisions.

As you set out to understand how you can leverage path to purchase to move the needle on your bottom line, it’s important to have a qualitative understanding all the various places that someone could come into contact with your brand.

Start by building a mind map or customer journey that documents your various marketing and advertising campaigns. Think: What are all of the ways that a customer may come into contact with your brand before making a purchase?

Micro Moments

When it comes to the study of consumer behavior and the path to purchase, we tend to think of influencers, in the big picture – a billboard, a video, an advertisement. These engagements can, and very often do, skew much more subtly, though.

  • As a business owner, you may think about your experience requesting a demo on a new piece of software. Was it difficult? Easy? Fun? Did this experience make you more, or less likely to purchase that product?
  • For your customers, was an email you sent filled with offers for products that that individual would find useful? Or was it a broad, “one size fits all” campaign? Did this engagement make shoppers more likely to purchase your product?

Google refers to these tiny transactions as “micro moments” and it is precisely through understanding these types of personalized micro-engagements that we can begin to further refine control our path to purchase.

Don’t forget to add these into your overall map.

How Loyalty Programs Change the Path to Purchase

This journey in not unique to customer retention. It is a model for understanding the way that any given shopper may come to discover, engage with, and evangelize your brand. With the addition loyalty programs, we have an opportunity to open a second path however. One that is heavily weighted in your favor and gives you the ability to leverage specific customer data to more readily influence the decision-making process, in real time.

What’s the catch? To access this second path, you’ll need to onboard new customers to your loyalty program. This is, of course, a topic unto itself. Once there however, it’s time to start leveraging the data they provide to start

We often say that signing a new member up for your loyalty program is a conversion unto itself – almost always, a more valuable one than a single sale. While it may not necessarily represent an exchange of currency, there is quite a bit of unseen value changing hands. You are providing potential customers with access to exclusive discounts and other promotions and they are providing you with important details about themselves, which, in knowing, you can leverage to build the kind of highly relevant offers and promotions that strongly influence your customer’s journey.

Loyalty Discount Methods - Coupons, Phone, Checklist

One of the reasons that loyalty can play such an outsized roll in influencing the path to purchase is that customers who join your program have, in doing so, added you as a trusted source. They believe that you provide the goods and services they’re looking for, at a price they can afford. Because of that, they’re willing to give you insights into what they need.

In general, this is the kind of data that marketers climb mountains for. Now, instead of blindly pushing content to a general demographic (which may have everything or nothing at all to do with a customer’s actual preferences) you can serve the right products to the right customers at the right time.

Influencing Path to Purchase with Loyalty

Personalization is a big part of this, but not the end all, be all. It’s about curating the shopping experience through a series of touch points that engender familiarity and good will.

Awareness

At the first stage in the path to purchase, a customer becomes aware of a need. If a customer has joined our loyalty program, they’re certainly aware of our brand and the types of products we offer. How can we use that knowledge to make them aware of the right product at the right time, however?

Awareness, is at some level, simply a matter of repetition and relevance. The more we can engage customers with information about products that appeal to their general interests, the more likely it is that our brand will be the first to pop into their mind when they’ve established a desire for a particular good or service. And the more likely we will be able to influence it.

Segmentation

There are, effectively, two great ways to leverage segmentation in creating product awareness (Though you shouldn’t let that limit your creative process). While customers may not buy each and every product you offer, you’re teeing them up for the conversion when the time is right.

Segment customers in your loyalty program by interest groups. It’s easy to do this when they first join. Alternatively, each customer can be added to a subscriber group as they purchase specific items. Use these segments to create:

Targeted Emails

Build department-specific emails with content based on similar products. For instance:

  • If someone has entered your “boots” segment, send an email about pants and socks.
  • If someone has entered your “jewelry” segment, send an email about perfume.
  • If someone has entered your “dry cleaning” segment, send them an email about tailoring.

This program is easy to scale this program by creating an email template and replacing the products that you want the customer to buy with segmented content, as you go.

Retargeting

Since you have your customer’s email, try building social media product ads on based on the email lists of customers in specific segments. For instance:

  • “Members of Linda’s Loyalty Program get 10% off of Boots for the Next Week”
  • “Buy Boots and Get 10% off Socks Next Week”
  • “Buy Two Pair of Boots and Get Free Socks Next week”.

If you want to amplify your reach on Facebook, try delivering ads based on “Look-A-Like” audiences. Facebook will automatically find users who exhibit behaviors patterns and interests similar to your existing shoppers and serve your ads to them, as well.

Dynamic segmentation, or the ability of your loyalty software to create these engagements in real time and based on a customer’s specific behavior, is advancing quickly. Keep an eye out, as this will represent a huge leap forward in product awareness and the path to purchase.

 

Consideration

At the second stage in the shopper’s path to purchase, your loyalty program members are deciding how to fulfill this need. What are the big factors here? Research tells us that price, shopping experience, availability, and peer influence play the biggest roles.

Here’s how you can use loyalty to influence your buyer, at each one:

Price

While it’s impossible to know what our competitors’ prices are ahead of time, we can use value added benefits like points, loyalty dollars, BOGO’s, etc… to easily increase your unique value proposition. The goal of offers and promotions like this is twofold:

  1. We want to embed the value of your loyalty program so deeply into the consideration phase of your shopper’s path to purchase that it becomes a habituated aspect of their journey.
  2. We want to leverage that habit to increase reach and get the upper hand on our competitors while still remaining competitively priced.

Weighing Decisions - Scale

Shopping Experience

Customers are engaging with our brands over more platforms, channels, and devices than ever before. When it comes to loyalty, omnichannel software allow customers to join and access your program over any of them. This creates an easier shopping experience for customers and influences their path to purchase.

Product Availability and Delivery

The kind of advanced omnichannel order processing tools that power single shelf experiences are often paired with integrated loyalty programs. In today’s “on the go” world, convenience is a major factor in the ‘consideration’ stage. With order processing, you customers can order and receive their goods, anywhere, taking up less of their time and resources.

Peer Influence

It’s often said that word-of-mouth marketing is more valuable than any other kind. You’ve probably had this experience yourself.  Did your friends, family, or co-worker’s opinion influence your decision? Rewarding those in a position to influence other shoppers buying decisions through ambassador programs is a no-brainer and has proven results.

Conversion

At the third stage in the path to purchase, shoppers are adding products in their cart. This is a particularly important step where separately branded, but similar, products are sold (A grocery store, for example). As a retailer these could benefit you in the form of manufacturer rebates and rewards.

Comparative Pricing

You’ve probably seen examples of comparative pricing at your local grocery store. When viewing an item, shoppers are presented with both a retail and ‘club’ price. Comparative pricing can have a powerful influence on which products your customers select as well as help drive new member sign-ups.

Value Added Benefits

We spoke a little about ‘value added benefits earlier in this post. Similar to comparative benefits, value added benefits have an “if, then” relationship. For instance:

  • If you buy two, then you get one free
  • If you buy one, then you get the second one half off
  • If you buy three, they you will get double points

In this way, customers are emotionally rewarded for selecting a specific product before they’ve ever purchased it. Value added benefits can also play an important role in increasing your average order value, as they’re great for incentivizing multi-unit purchases.

Man deciding on a product

Evaluation

In the modern shopping ecosystem, the customer journey is often more a circle than a straight line. Engagements that customers have at each stage in the buying process influence their next purchasing decision. When certain tools are used to maximize feedback, they can be leveraged to influence the next purchasing decisions, as well.

Surveys

Sending automated surveys about the products your customers have purchased gives them a stake in the product and an opportunity for you to receive valuable feedback. A survey response shouldn’t be the end point in your shopper’s journey, however. Use surveys as a jumping off point to retarget customers who were happy and send offers for different products to customers who aren’t.

Next Purchase Coupons

Now that you know that a customer has purchased a product, keep them coming back with a targeted discount on that product by offering a small coupon. If a coupon is expiring, make sure you build an automated reminder, in the form of an email. The next time they’re in the market, they’ll likely think of you first.

Accumulated Points

Accumulated or ‘Ghost’ rewards are applied only after the shopper has reached a certain quantity or spending threshold.  This point structure leverages the nature of the sunk cost. That is, it is more likely that a customer will think of you next time, if they’re working towards an established reward.

Split Testing

Want to see how effective these strategies are at effecting your business? Start by A/B testing each stage of your funnel. As you move down the path to purchase, pause for thirty to ninety days and you’ll start to see increasing engagement.

If you’re interested in better understanding how bLoyal can help you take control of your customer’s path to purchase with deep, product level insights, request a free demo of our software above. You can also reach our team of loyalty marketing professionals at sales@bloyal.com

Grow Your Loyalty Program Preview

The Top 7 Ways to Grow Your Loyalty Program Membership

Summary: You don’t have to look far to realize that loyalty programs do more than simply generate repeat customers. When applied correctly, they give you the type of deep understanding about how customers engage your brand which helps build a better shopping experience, enables you to spend your marketing dollar more wisely, and finally, generates incredible word-of-mouth.

Investing in the expansion of your loyalty program therefore, is one of the most effective ways that marketers can amplify the return on their investment. In this post, we describe proven methods for increasing loyalty program signup through omnichannel loyalty software.

Benefits of Growing Your Loyalty Program

One of the most frequent misnomers we run into when helping implement a new customer retention strategy is the notion that it can only be leveraged to bring back existing shoppers. In fact, the benefits your loyalty program offers may be just the ticket for driving new customers in.

No, a loyalty program membership, in and of itself, will not do anything to move the needle on your financial goals. But this isn’t unique. There are many other types of transactions that may not lead to an immediate purchase, but do drive significant value. Earning an email subscriber, for instance, may not immediately drive your bottom line, but the customer has given you a foot in the door and an opportunity to earn their business.

Similarly, building membership in your loyalty program can (and should) be a goal unto itself. In addition to simply receiving information about a shopper with which to make further contact, you’re receiving a virtual treasure chest of information in terms of who that shopper is, what they’re interested in, and how they buy.

Advertising

Get started with advertising your loyalty program by building program specific landing pages. If you’re not familiar with the concept of a landing page, it’s essentially a highly focused webpage that provides a specific segment of your potential audience with just the information they’re looking for and allows them to quickly convert. In this case, your conversion would be a loyalty program signup.

Once you’ve created a loyalty or club based landing page (Our friends at Unbounce are a great place to start), it’s time to start driving visitors with targeted ad spends.

Search advertising is a great place to get started. According to Google’s “Keyword Planner” the phrase “loyalty program” is searched over 7500 times a month. Don’t stop there, however. Remarketing campaigns can help reach people who have visited your website, but not purchased anything with a great incentive to buy.

Social media advertising on Facebook, Instagram, and Twitter offers similar opportunities for growing your loyalty program. We’ll talk about the specific benefits of social media further down this post, but many of the strategies are the same.

Merchandising

Whether you do business online, in-store, or through an application, merchandising is incredibly important to growing your loyalty program customer base. There are a couple of known strategies here, but don’t be afraid to get creative. Grow Your Loyalty Program with eCommerce Merchandising

Comparative pricing

You’ve probably seen examples of comparative pricing at your local grocery store. When viewing an item, shoppers are presented with both a retail and ‘club’ price. Comparative pricing makes a quick, clear case for what’s to be gained by joining your loyalty program.

Comparative pricing should be reinforced in your checkout process by showing customers what they have or could have saved by being a member of your program.Grow Your Loyalty Program In-Store Merchandising

P.O.P. Point of Purchase

Your customer is about to checkout. It’s a good time to reinforce your comparative pricing model, but you also have room here to let customers know about other loyalty program benefits, including:

  • Early Notice on New Products
  • Exclusive Loyalty Member Benefits
  • Free Shipping Guarantees
  • Priority Entry to Special Events

This can be done through P.O.P signage, POS system notifications, verbal asks, etc.

Geofencing

Let customer who travel near or enter your store know that they can join your program with a loyalty based call to action notification. There are a couple of ways to execute this and it will depend on how integrated your system is:

  • Push Notifications
  • Social Media Location Based Advertising
  • Geocaching

This has shown to be an incredibly effective tool for converting window shoppers to customers.

Outbound Marketing

It’s vitally important to build loyalty program assets and calls to action directly into your outbound marketing campaigns. This means that your program should be a component of all outbound communications including email, text, push, and even receipts.

In order to get the most return from these campaigns, we recommend using a passive voice. That is, we don’t explicitly want to sell our loyalty program through this messaging. Rather, we want to expose benefits.

For Example:

  • Scarves Now 10% Off for Club Members
  • Get 10% Off Your Scarf with Our Loyalty Program
  • Love this Scarf? Get 10% Off

 

Make it a Part of Your App

Add a loyalty program tab to your branded application. This is a soft sell and feels organic. It provides the option of joining your loyalty program without the pressure.

For those with the resources, we’ve found gamification to be of enormous benefit here. For example: Assign badges or points for each part your application that a customer engages with. As customers travel through the app, they will discover your loyalty program. Applying point multipliers for taking the next step can also have a huge impact on your overall join rate.

There are several ways to implement loyalty as part of your application development process. bLoyal, for instance, makes a loyalty SDK that sits directly within your existing app, allowing customers to join your loyalty program, check their balance, and change personal settings, all without leaving your app’s interface or UI.

Ambassador Programs

Word-of-Mouth is one of the most powerful drivers of new shoppers Loyalty based ambassador programs are one of the most oft overlooked ways to generate interest in your customer retention marketing strategies.

Build it Into Social Media Campaigns

One of the most powerful aspects of social media for many retailers is that it allows brand evangelists to amplify the reach of their content through ‘sharing’ across all the platforms where customers spend their time.

As with all inbound content strategies however, it’s highly important that your offers don’t appear too ‘salesy” or contrived. Here’s some more ways to leverage social media when growing your loyalty program:

  • Optimize – Ensure that your loyalty program landing pages are optimized for social with the correct Open Graph markup. This will allow them to be shown with big pictures and increase shares by up to 80%

  • Advertise – Organic reach on social media runs about 5% to 7%. Just because you’re posting loyalty program content to social doesn’t mean that everyone is seeing it. Try utilizing Facebook’s “Look-a-Like” audiences and “Offers” features to make a real impact here.
  • Strategize – Use targeting options to filter content so that your most active segments see it. When you show content to more relevant audiences, it increases engagement and garners more organic reach.

51% U.S. retail professionals said social media drives customer acquisition and 44% said it drives retention

Cross Promotional Partnerships

Every business has its own fan base. Sometimes it can be difficult to break out of your ‘zone’ and reach new customers, however. Just like there are other businesses that compete directly with you, there are many more that compliment you. For instance: A restaurant may have a competitive fan base with another local restaurant, but a complimentary fan base with a local movie theater.

Merchants who use these complimentary businesses to leverage growth in their loyalty program have an opportunity to reach a whole new set of customers in a symbiotic way.

For instance, in the example given above:

  1. Your restaurant could work with the adjoining theater to offer triple points if someone shows their theater tickets when joining your program.

 

AND

 

  1. The theater could provide early access to their next theater if they show that they’re a member of your loyalty program.

The promotion benefits both businesses equally and helps to grow your loyalty program.

 

Increasing loyalty program penetration is one of the most important things you can do to get more out of your customer retention strategy. Growth is often just a matter of letting people know that it’s there and how it can benefit them. Moving forward, it’s important to build loyalty based calls to action, benefits, and strategic partnerships directly into your marketing mix, in order to take the next steps.

If you’re looking to grow your loyal fan base with omnichannel loyalty marketing software, bLoyal can help. Simply click on the “Request a Demo” button at the top of this page or contact our sales team, here.

Loyalty KPIs Preview

Loyalty Marketing KPIs – A Guide to Getting Started

Summary:

Loyalty programs are an investment. For most businesses, they mean added hours of learning, setup, management, and understanding. Proving their return with the right key performance indicators can present unique business intelligence challenges for even the most experienced marketers. In this post, we talk about some of the unique pain points, solutions, and opportunities associated with understanding your loyalty marketing KPIs and how they affect the bottom line.

The Importance of Hard Data

Someone once said to me, “The first job of marketing is to prove itself”. That is, no matter how great we think our work is, it means nothing, unless we have a story to tell about it – a deliverable that describes not just where we are, but how we got there.

Time and again, the adage has proven true for me. The process of filtering down and absorbing the data collected during any given campaign’s execution has been as vital to the next pivot in my strategy, as the result itself:

  • What products drove our last jump in sales?
  • Who was buying?
  • What led them to buy?
  • What channel did they find us on?
  • If it was through a promotion, was the AOV profitable enough to offset campaign costs?
  • How often did customers who took advantage of that promotion return and shop with us again?

Just some of the many data points that help us make the iterative adjustments to our strategy that added up to big gains at the end of the year.

In reality however, these KPI’s are often only as qualified as the methods we use to collect them. For merchants operating in the brick and mortar or multi-channel retail space, this has been an incredibly difficult problem to solve.

A Brief History on the Evolution of KPIs

For those of us old enough to remember, there was a time when marketers would anxiously await quarterly reports. When they finally arrived, it was like tearing open the wrapping paper on our birthday presents. Though it provided a bit of an adrenaline rush, we were essentially flying blind, for months at a time.

Loyalty programs are as much a way to better understand consumer behavior through the application of data, as they are a way to bring in and retain new shoppers.

Zoom forward thirty years and virtually any small piece of data we want is available on demand and able to be parsed against almost any other piece of micro data, no matter the significance, in real time.

While this has been a virtual God-send for digital marketers and ecommerce merchants, it left multi-channel brick and mortar businesses fumbling with how to aggregate and normalize multiple data sources in a way that made sense. Almost infuriatingly, we could now measure virtually any action customers took on our website, but didn’t have a great way to tie this data back to our in-store sales.

How Loyalty KPI’s Change the Game

Enter omnichannel loyalty. Loyalty programs are as much a way to better understand consumer behavior through the application of data, as they are a way to attract and retain new shoppers.  It’s through this understanding that we develop the kinds of personal interactions that breed loyal customers.

Loyalty software acts as the glue that holds your data together, across channels, platforms and devices. Each customer, having been assigned a unique identifier can now be that can be tracked wherever your they choose to do business with you.

This presents a conundrum for merchants, large and small. Adding a new layer of loyalty based metrics on top of an already dense web of data that your web properties create, can seem daunting, to say the least. Yet, customers now expect the highly tailored shopping experiences based on this very data.

  • They want to be shown ads for products that they’ve expressed interest in.
  • They demand offers optimized for the places they shop.
  • They expect account information including purchase history and payment methods to be channeled seamlessly from one touch point to the next.
  • They want to be able to shop at one point of sale and pick up at another.

 

Loyalty KPIs Shopping ExperienceLeveraging omnichannel customer retention software helps you build customer loyalty. Equally as important however, it also gives you a more complete picture of who your customers are, how they shop, and what drives them all the way from the zero moment of truth to the point of purchase. Gaining a complete understanding of how loyalty program data can drive KPI’s will help you better serve customers and grow the bottom line.

Getting Down to Numbers

*Whether you’ve onboarded a specific loyalty program software or not, the information contained in this post can be valuable to you. If you have, many of these metrics will only be available for integrated programs, however. If you haven’t, bLoyal builds integrated omnichannel loyalty software and we’d be happy to speak with you about your needs.*

So, what’s your next move? How can you extract the right data to build, manage and improve the personalized shopping experiences that customers now demand? How do your loyalty program numbers fit with your overall business numbers? And what can you do better to improve your understanding of how customer retention marketing is effecting your bottom line?

There are literally an endless number of ways to slice, dice, cut, and shred the information most omnichannel loyalty program produce. If you’ve already integrated, you’ll now be able to see overall shopper data comingled with loyalty program data. You’ll know which channel your most valuable shoppers came in over, which programs are generating the most traffic, what your most important loss leaders are.

Some data will look like nothing at all, unless stretched out over a longer stretch of time. Others will seem like dramatic spikes that, in the big picture, don’t really have too much bearing on your bottom line.

At this point, we would encourage you to take a step back from the ledge and remember that you own your data. Your data shouldn’t own you. The first step down the path to better utilizing this data is understanding how to identify which numbers are crucial to your success and which are, in effect, white noise.

Getting Started with Loyalty KPIs

What are some effective ways that we can take back control of our data and begin building loyalty program KPI’s which act as bellwethers for our overall strategy?

Figuring out how program data fits in with your overall measurement strategy is the first step.

There are three main questions that your loyalty KPIs should be answering:

  1. How do loyalty program members perform against non-members? How is loyalty driving your bottom line?

 

  1. Which of your loyalty initiatives are providing the most benefit? What members are having the biggest impact? Why do customers use your loyalty program on one channel more than others?

 

  1. How can we continue building our programs and driving growth using loyalty marketing strategies?

Loyalty KPIs GoalsOur goal is distill the hundreds of thousands of data points that any marketing program produces, into a set of key performance indicators that we can look at, in order to judge the relative health and effectiveness of your loyalty program, both in its own right, and as it affects your larger financial picture.

How much weight should you put on these figures? The answer is “No more than any other KPI”. While it’s important to have them, it’s even more important to understand what drives them. They should be reliable, but you’re going to want to become intimately familiar with what they mean. In the same way that you would when becoming fluent in a new language, you want to learn the meaning of each word in a sentence, instead of just memorizing the sentences, alone.

For example, what can your loyalty program data tell you about the effect that market penetration has on your overall bottom line? Which device yields the most active users. What is your most popular method of sign up?

We’re going to answer those questions here and give you some other valuable pointers for understanding how loyalty is driving your bottom line.

Understanding Value

When we speak of loyalty marketing, there are two clear goals:

  • Increase total number of visits by any given shopper, during a specific period.
  • Increase the amount spent by any given shopper, with each visit.

While these measurements are, by no means, exclusive to your loyalty program, they’re the best metrics to use if you’re looking tell a story about how effective you’ve been. Keep in mind, however that both these numbers can be effected by a wide variety of circumstances throughout your organization. These aren’t dials, so much as they are needles. They are crucial to knowing where you stand, however and will be a good indicator of your loyalty program’s overall success.

Segmented Customer Lifetime Value

Of the big kahunas, customer lifetime value (LTV) is the big kahuna. We want to better understand how, or whether, your loyalty investment is moving the needle on the value each customer brings to the table over the course of their time doing business with you.

So far, so good.

Measuring LTV is nothing new. There are two basic formulas here: One is a basic 30,000 foot overview. The other takes into account more advanced metrics like churn, decay, and stickiness. For simplicity’s sake, we’re going to focus here on the former.

When measuring LTV, the traditional models say something to the effect of:

The profit an average customer brings in over the course of a year

(-)

The average amount it cost to acquire that customer

(*)

The number of years that customer shops with you

(=)

Customer Lifetime Value

 

The difficulty with this model is that it provides a limited scope of information. This is a result of bundling all of your customers into one large group. In reality, we know that the way that a 50 year old man in Ohio shops is going to vary widely from a 20 year old woman from Washington. Different types of customers may cost different amounts to acquire, serve, and close, depending on how they shop.

Segmented customer lifetime value is about understanding these unique buyer personas and using that data to serve deeply personalized campaigns that drive engagement.

While this has become quite a bit easier for eCommerce merchants in the digital age (though it’s still not commonplace), omnichannel loyalty has created a similar revolution in the way that multi-channel or brick and mortar merchants are able to collect and analyze loyalty program data by using tokenized identifiers to track shoppers over multiple platforms – in store, online, or through mobile devices.

A revised segmented model looks more like this:

The profit a specific dimension of your customers brings in over the course of a year

(-)

The amount it cost to acquire them over a defined channel

(*)

The number of average number of years that customers shopping over that channel stay with you

(=)

Segmented Customer Lifetime Value

Segmented Average Order Value

If customer lifetime value had a lieutenant, it would be AOV. Like your LTV, AOV has been around a long time. A standard AOV however would describe our customer, again, as an aggregate number.  Like segmented LTV, Segmented AOV makes an impression when you can begin to understand it within the context of a customer’s broader behavior patterns and purchase history.

Put these two metrics in your pocket for now. They’ll be important numbers to glance at from month to month, check in on quarterly, and investigate, yearly.  We, in no way suggest doing away with your existing LTV or AOV measurements. If you’re looking to maximize loyalty investment, digging into the details is going to be a great start, however.

Loyalty Program KPIs

Drilling down into your customer retention specific metrics is where the magic happens. Understanding how your various strategies are effecting the following KPIs, will help you better understand how they move the needle on your Customer Lifetime and Average Order Value.

Onboarding

Signups

In our recent blog, ‘Advertising your Loyalty Program’, we established that building your loyalty program is a conversion, unto itself. We know that loyalty program members spend more, and with greater frequency.

In fact, when examining 250 bLoyal clients, loyalty program members show an across the board average of 36% higher customer lifetime value than non program members and 32% higher average order value.

 

Loyalty KPIs Lifetime ValueKeep in mind that a well measured signup metric provides two benefits. That of increasing your bottom line. It should also give you a sample data pool on which to start making loyalty program decisions. It’s not critical that you maintain 100% penetration, but the higher your join rate, the more reliable your sample data.

Signup Growth Rate

It’s important to measure the history of growth rate. Remember however that program signup KPIs, unto itself doesn’t necessarily mean that people are staying. Pair high signup rates with overall churn, to better understand how well you’re doing at keeping customers that you earned.

In our experience, signup lift can increase at up to 10% a month, but 5 to 7 percent is probably a healthier expectation.

Signup by Device / Location

Where did your most active customers sign up? It’s a good idea to focus on the good and cut the dead weight (in as much as possible). For instance, and all things being equal, if you find that 90% of program members joined through a website landing page, let’s invest there. A low signup percentage isn’t necessarily a harbinger of doom, but we want to grab the low hanging fruit, first.

You can always go back and devise new ways to encourage signup over lower performing channels.

Engagement per Signup by Device

How does the LTV and AOV of customers who signed up on mobile, compare to that of customers who sign up via your website or at the register?

bLoyal aggregate data shows that there can be a wide disparity between signup locations. For instance, younger users tend to be more comfortable with mobile devices to shop. They also have more expendable income. Depending on what you’re selling, it may be more valuable to focus campaigns around a single signup type.

Overall Membership Penetration

Membership penetration describes the percentage of your overall customers that are signed up for and actively using your loyalty program. While you’ll never get 100% in this category, we’ve seen pushes up to 60% among existing bLoyal clients.

Why does this matter? Beyond just having more customers onboarded. This is a large enough data set to get a pretty clear picture of your overall customer behavior patterns.

 

Use

Frequency

How frequently are users interacting with your program? This can be a measure of how well you’re engaging customers with new offers. Low frequency rates can tell us a couple of things, including how persuasive your offers are, whether they’re relevant to the user you’re offering them to, or whether they’re being promoted over the most effective channels.

 

This can be a process of elimination, but at the end of this process, you will have some real data to either back up or dispel your notion of the efficacy of your program.

 

Breakage

You want to know, not only how many people are taking you up on your offers, but where, when, and how. Naturally, not everyone is going to cash in on every promotion, but you should be able to form a clearer picture of what your customers are interested in, by examining which of your offers are most engaged with.

We want to look at breakage from three perspectives:

  • Overall Growth – Is your breakage growing over time. Are more people using your offers?
  • Comparative by Offer – Do offers on one product get used more often than offers on another?
  • Discount Values – What is the critical mass for breakage. How much of a discount do you have to offer, in order to get consumers to follow up on the offer?

Be careful to understand and test each variable, independently. For instance, is the product driving breakage or the promotion?

Goal Completion

Every marketing campaign, loyalty based or otherwise, has a conversion point. Sure, we want to drive users to spend more. But that 30,000 ft view is only managed through the lens of how successful your individual campaigns are. What is your specific campaign goal? How often are you meeting them?

Origin – Of the members that completed your goal, what is the break down on four key figures?

  1. Where channel did they first learn about the campaign?
  2. Which channels drove the highest engagement with the campaign?
  3. Where and on what device did they redeem the offer related to the campaign?
  4. Was the order value on the ticket where they completed the goal, higher or lower than their AOV?
Loyalty KPIs Offers & PromotionsFrequent Buyer Programs and Goal Completion

There is some enormously interesting data surrounding gamification and goal completion where it concerns your loyalty program metrics. For instance, using “sunk cost” methodology, wherin you start a customer with a certain amount of points or loyalty dollars, can significantly impact a customer’s decision begin engaging with FBPs.

For example, take a simple punch card you’d find in a coffee shop. Offering a program member triple points for their first purchase or punching three holes, instead of one, can dramatically increase breakage by driving personal investment in goal completion.

Frequent Buyer KPI’s should, of course, include obvious metrics such as “how many times the goal was completed”, but should also be split tested to see few instant rewards a customer has to receive, in order to feel invested and continue towards the goal.

You’ll also want to measure which demographic and psychographic (that is buyer types, based on interest), more often complete your goals. 21% of millennials say that they’ll 33% of Gen X’ers will do the same.

Engagement

Word-of-Mouth

One of the strongest drivers of loyalty program growth is often ambassadorships and word-of-mouth. Social shares of your loyalty programs are a great way to attach a ‘word-of-mouth’ metric to your dashboard. It may not be the whole picture, but if you provide engaging content, it’ll provide enough of a spike to consistently measure how your program is performing in this elusive measurement.

If you want to take the next step into ambassador programs, creating trackable referral codes can be a great way to understand who’s helping to grow your program. Next measure how different offers perform across business types

 Loyalty KPIs Ambassador Programs

Retention

Retention shows the decay rate of member activity. This can help you determine how frequently you should be making offers. Like the story of ‘Goldilocks and the Three Bears’, we don’t want to offer more discounts than we have to. Not enough won’t drive return shoppers, though. Make sure that you are keeping an eye on how often and what size promotions you should be offering in order to meet the KPI that you’re looking for.

Churn

Churn is going to be a metric of how many people are leaving your program vs. how many people are coming in. At bLoyal, we generally consider a program member hibernating when they haven’t engaged your program for at least 12 months. Every organization differs, though. At the very least, you need a 1:1 ratio here. An ideal 1:1.5 to 1:2 is a great goal to start with, but we’ve seen ratios as high as 1:3.

Keep in mind that the closer you get to maximum penetration, the more this will slow.

Split Testing

The importance of split (or A/B) testing your loyalty program offers and promotions is essential to growing your loyalty marketing programs. In most advanced loyalty programs, there is some method of sending out split tests with varying discount percentages, points offered, etc. to similar target groups to see which campaign performed better.

Closing the Deal on Loyalty Marketing KPIs.

As marketers, we’re never far from the need to tell a story about how the work we’re doing is affecting the bottom line. As executives, business managers, and entrepreneurs, it’s imperative our success. Knowing which KPIs act as true indicators of your program’s health can help measure the success of your program; not just against non-program members, but against your company wide performance indicators.

If you’re interested in learning more about how bLoyal measures loyalty program success, contact us for a free demo.

 

Loyalty KPI Cheat Sheet

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Customer Lifetime Value and Segmentation Preview

Customer Lifetime Value and Segmentation

Summary:

Customer lifetime value (LTV) is one of the most important key performance indicators for almost all retailers. How it’s defined is not as set in stone as you might think, though. With the addition of omnichannel loyalty software, businesses with offline points of sale now have the ability to understand who is buying what and how much. In this post, we explore how to better leverage omnichannel segmentation as a way dial in on customer lifetime value and what these metrics mean for your marketing strategy.

Measuring Customer Lifetime Value

Measuring Customer Lifetime Value is nothing new. In fact, it’s one of the most important metrics that large and small retailers alike, look at when assessing the relative growth of their business. And for good reason. This metric is a virtual gold mine of information that tells us how well we’re doing with attracting, retaining, and upselling each customer that walks into our store, ergo how loyal our customers are.

There are, in truth, two versions of the math required to calculate your results; ‘customer lifetime value’ and ‘simple customer lifetime value’. Neither of them are “right” or “wrong”. Which one you use, simply depends on your propensity for a bit of arithmetic and how exact you want to be. The main difference between the two is that the simple CLV doesn’t account for year over year changes in revenue, acquisition costs, etc.

Profitability Arc

For our purposes (and to make sure you don’t fall asleep reading this), we’re going to assume that you’re using the ‘simple’ method, which looks something like this:

The profit an average customer brings in over the course of a year

(-)

The average amount it cost to acquire that customer

(*)

The number of years that customer shops with you

(=)

Customer Lifetime Value

Of course, there are other important variables that can be factored in here. Those include metrics like churn, decay rates, et al. While larger mid-market and enterprise business may want to dig a little deeper using these measurements, most small and medium sized businesses are just looking for a running tally of whether their customer lifetime value is growing from one year to the next and a simple LTV metric provides just that.

What LTV Alone, Doesn’t Address

Traditional models tend to present customer lifetime value as an aggregate data point – one which groups many different types of shoppers together, equally. Unfortunately, this methodology doesn’t tell us a whole lot about how LTV can (and almost always does) differ between varying buyer personas, as defined by factors like purchase history, shopping device, or location.

What would otherwise seem a highly relevant piece of data loses its value in the vacuum of context required to decipher it. Segmenting data points over multiple dimensions and demographics allows us to build a shopping experience that match each group’s expectations. And If there’s one thing we know, it’s that today’s shoppers demand highly relevant shopping experiences.

For example:

Demographic Segmentation and LTV

Customer lifetime value, in and of itself, doesn’t tell us that women over 50 tend to have greater LTV than men under 25. There’s a lot we can do to move the needle with this information, including manipulation of our marketing budget to lean heavily on the more profitable of the two groups.

Demographic SKU Level Segmentation and CLV

Going one step deeper, if we know that women over 50 who buy staple SKU’s, such as milk, eggs, and bread, tend to have a 20% higher customer lifetime value than women over 50 who tend to buy discretionary products like spices, baking ingredients, and snacks, we can further narrow our marketing budget down to focus on capturing women over 50 who buy the items in the first product set, in order to more effectively move the needle on our bottom line.

Connecting the Dots for Multichannel Retailers

Now, if you’re an eCommerce only vendor, you might be saying to yourself “that’s not true. I can do all of this easily through my CRM, Google Analytics, etc.” And you’re right. It’s important to know that for eCommerce only merchants, this type of product level segmentation has been available for years and large retailers frequently leverage it to decide what metrics should be driving targeted online advertising campaigns and the like.

Multichannel brick and mortar based retailers (who may have an ecommerce channel as part of their greater business strategy) on the other hand, have and continue to struggle with obtaining the same level of granularity in-store as they do online.

More specifically we get to the question of how to connect the two marketplaces. Insights on how and where customer shop can affect CLV as much as who they are and what they buy, after all.

 

Customer Lifetime Value and Omnichannel Loyalty

For example:

Within our group of 50+ women who buy staple SKUs, we might find that online shoppers tend to place smaller orders, more frequently. Because of delivery fees, this would lead to a lower customer lifetime value and thereby prompt us to focus a higher percentage of the overall marketing budget on a customer set that is more likely to shop in store.

Assuming that online data can be subbed in for in-store behavior is a false equivalency and a dangerous one, at that. Different types of customers may cost different amounts to acquire, serve, and close depending on how they shop.

Upgrading to Omnichannel

Omnichannel loyalty programs help unlock that problem by allowing merchants to track customer purchase behavior through tokenized account identifiers that can be retrieved over almost any channel available, including your website, brick and mortar locations, email, social, text, and more. This provides a single seamless customer record that is vital to understanding segmented customer lifetime value.

Understanding your flat CLV across channels is important, but perhaps more vital to multichannel retailers is understanding how each channel compares to the next.

 

Finding the Best Shoppers

Working with Segmented Customer Lifetime Value

Does it matter that your loyalty program only reaches 40% to 50% penetration? Yes and no. We need to ensure that all our buyer personas are represented in significant enough measure, of course. That said, we only need a percentage of our overall customer base, in order to create actionable insights from this sample data.

The more active users we get, the more reliable our core data will be. That means that it’s important that we direct marketing resources not just towards customer retention but bringing new customers into our program through various user interface and merchandising calls to action.

Understanding Segmented Customer Lifetime Value

Let’s take another look at that formula WITH SKU level product and demographic data thrown in.

The profit a specific dimension of your customers brings in over the course of a year

(-)

The amount it cost to acquire them over a defined channel

(*)

The number of average number of years that customers shopping over that channel stay with you

(=)

Segmented Customer Lifetime Value

Contrary to what it may seem, we don’t suggest replacing your aggregate LTV model. Traditional LTV exercises can create valuable insights into your business’ aggregate success over time. We do suggest adding some texture and nuance with segmented customer lifetime value.

Customer Lifetime Value – The Bottom Line.

What we recognize today as LTV is, at some level, a product of the digital revolution and while it’s relatively easy for businesses that exist solely in eCommerce realm to gather the required data points to understand the insights it provides, it’s another matter entirely for multichannel brick and mortar retailers.

None of this is to say that ecommerce only merchants don’t have quite a bit to gain by leveraging segmented LTV. Having access to this data and knowing how to put the pieces together into a single dashboard can be daunting proposition. Wherever you do business, loyalty software can act as an excellent hub for collecting, communicating, and interpreting what this data means.

Omnichannel loyalty programs however, can help your business close the loop on building segmented customer lifetime value into your overall key performance indicators in a way that exposes truly actionable intelligence.

If you like to learn more about how you can get started with bLoyal please contact our sales team or request a free demo, above.

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