Why Personalization is the Key to Customer Loyalty


Why Personalization is the Key to Customer Loyalty

By TMCnet Special Guest
  |  November 12, 2013

During the many trade shows and conferences Kobie executives have attended in the past year, the recurring theme of personalization has been a top agenda and conversation topic.

At Kobie, we’ve also talked a lot about personalization when it comes to pricing as well as offers. Despite some retailers cutting their loyalty programs altogether, personalization is clearly on loyalty marketers’ minds: how customer relationship management and the use of mined customer data can help tailor shopping experiences to individual customers. When combined, these themes get to the very heart of how today’s loyalty programs can use available customer insights, gathered through all channels, to deliver a seamless experience that engages those customers with offers that speak to their personal preferences.

This focus on personalization is critical when you consider the latest loyalty program data. Loyalty programs grew by more than 25 percent during the past two years. Yet customer engagement dropped by 4.3 percent between 2010 and 2012.

Mixed data like this suggests a loyalty disconnect. Members are joining, but they’re not engaging with the level of enthusiasm and dedication loyalty marketers are looking for. Whether the problem is rewards that are irrelevant or too much trouble to redeem, for marketers, customer dissatisfaction and program apathy remain very real concerns. Thus, personalization is key when it comes to combating customer disengagement and driving richer customer loyalty. As different as customers are, one uniting factor is the desire to feel like the brands and products they use and love are tailored specifically for them. 

Personalization is vital not just on one channel but through an omnichannel loyalty framework that drives, tracks, measures and rewards incremental behavior throughout the customer experience. Much of this omnichannel outreach is occurring via digital channels, making the accumulation of, and the real-time action on, customer data that much easier. 

Combined with CRM software collecting data such as customer likes, dislikes, amount spent, purchases made and frequency of visits, loyalty program members in all demographics can become newly-engaged customers – provided their wants and needs have been genuinely catered to and addressed.

This is true even though consumers remain concerned about the safety of their information while aware that this same information might improve their relationship with a brand. Ninety percent of consumers worldwide are worried their data could be hacked and used to separate them from their hard-earned cash. Meanwhile, 85 percent of consumers know brands need to gather their information to create personalized offers while half say they approve of trusted brands using their information to tailor individualized shopping experiences.

Insights collected through engagement across multiple channels must be used to present customers with offers that are relevant and add real value to their lives. Otherwise, they’ll take their business elsewhere – a conclusion derived from the 2013 Maritz Loyalty Report, which found that over half of U.S. loyalty program members ended their engagement in the past year. The reasons for their disengagement are obvious: offers that didn’t speak to their needs or rewards and perks that felt forced. 

One of Kobie’s clients, BJ’s Restaurant and Brewhouse, a hybrid restaurant/retail chain, rewards members of its Premier Rewards program in an omnichannel manner and delivers a genuinely personal experience. Upon arrival, customers can check in with their mobile devices or at the hostess stand, where a table management system pulls up individual customer profiles. That way, the restaurant already knows, for instance, if a customer’s child is fond of a dish or whether a patron is lactose intolerant. This indicates to customers that BJ’s knows their preferences because it values them and their business.BJ’s is but one of a growing number of brands recognizing the need for loyalty offerings that go beyond the usual points-for-rewards offers to provide great shopping, dining or entertainment experiences that align with each customer’s preferences.

In our increasingly fast-paced world it’s easy for customers to feel as if they’re being treated like numbers and not individuals. But it doesn’t have to be this way as we have the technology that can rapidly reverse this sentiment.

Personalization used to be achieved on a small scale: imagine the local grocer remembering a customer’s name and his or her daily shopping preferences or a business owner contacting a customer when new stock arrived. Today, however, personalized omnichannel engagement scales those very human efforts to a much larger arena and ensures that customers feel personally rewarded while remaining committed both to the brand and the brand experience. Marketers making efforts like this will ensure that future loyalty reports show greater customer loyalty program engagement levels – not less.

David Andreadakis is vice president of loyalty strategy at Kobie Marketing (www.kobie.com).

Edited by Stefania Viscusi
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