Now that you’ve got the data what do you do with it!!!
In the previous two blogs we discussed why you should offer your customers a loyalty program and some basics on how to implement a successful program. The next step is to define some specific goals that you can accomplish by using customer purchase data and how you can achieve those goals.
- Extend the life time life value of your best customers
- Create reasons and promotions for additional visits to your store
- Create offers to move customers into new product categories
- Understand customer frequency and when they are considered “MIA”
- Develop rewards that are relevant and based on the customer’s purchase data.
- Categorize your customers into three groups:
1. Most valuable Can’t afford to lose
2. Most Growable- Have the most upside
3. Below Zero Tolerate them but don’t invest much
Using the data effectively so you not simply making the same offers to all of your customers presents the challenge. Most POS system provide some customer analytic tools and some even integrate with Social Media. I have had clients export data into Constant Contact and other email services to create email blasts. When you have grown the program to the point where you have a significant number of customers in the program you should adapt a more sophisticated approach. There are some third-party programs that offer a full suite of customer analytics and even an integrated an email and direct mail component. The better programs also are able to use geographic and demographic information to help you market to potential new customers that match the characteristics of your best customers. Once you’ve reached this point in the development of your loyalty program it’s time to re-think your whole advertising strategy. Most independent retailers I work with have no way to track the effectiveness of their traditional advertising spend. They spend on flyers, newspaper advertising and other media with no way to track the results. The last component of well designed loyalty program is the ability to track customer retention, the uplift of your average sale and the return on the money your spend direct marketing.
I am going to make one more post on Loyalty next week and go a little deeper into the payback of a program and introduce some of newer technologies that are taking loyalty to the next level.