Tristen Kendall-Barros, director of loyalty strategy & Insights, HelloWorld Inc.
Loyalty programs and promotions are invaluable tools to gain access to first-party data about your customers, which unlocks the ability to provide truly personalized experiences that increase loyalty and sales. An ability to more efficiently and conveniently shop from a brand who “knows me” moves the relationship away from transactional loyalty and heightens it to an emotional loyalty connection.
The challenge many brands have in developing these personalized experiences is gaining access to the first-party data needed. This is where loyalty programs and promotions can help.
First-Party Data and the Benefits
First-party data is consumer information that a company “owns” and collects directly from the consumer. This type of information may contain email addresses, purchase history, preferences and more.
It can be collected from the customer in several ways. For example, the data can be gathered through consumer actions (website browsing and purchasing behaviors) or it can be assembled through questions asked directly to the customer (surveys, customer service feedback or through the completion of profile and preference information.)
Two-thirds of marketers believe that first-party data provides the best path to customer understanding and high performance. Since first-party data is collected directly from the customer it is more likely to be accurate and allow the company to develop personalized communications and experiences that resonate with an individual resulting in increased loyalty and sales.
Access to first-party data allows the brand to speak directly to the individual consumer in a relevant, compelling way because they “know” the customer. “Eighty-four percent of consumers say that being treated like a person, and not a number, is very important to winning their business,” according to Merkle’s Q4 2019 Customer Engagement Report. This one-to-one communication makes the consumer feel appreciated and special resulting in increased loyalty. “McKinsey estimates that brands could improve revenue and customer retention by 10-30 percent through personalizing customer journeys and building a more loyal customer bases,” the Merkle report dds.
Loyalty programs and promotions can help companies gain access to this valuable resource and unlock hidden revenue potential.
Opportunities for Data Collection Through Loyalty
Depending on the category or industry, loyalty programs can be the instrument that unlocks access to first-party, individualized data. Loyalty programs can provide access to this data by providing:
1. Permissions to Utilize Data:
Loyalty programs provide brands an avenue to gain the consumer’s consent to utilize their data by offering customers a clear benefit (e.g., rewards, exclusive offers, etc.). With a heightened sense of security around who has access to personal data, your brand must maintain transparency and clarity with the customer about how their data is being used and continuously show the benefit to the consumer to preserve trust.
2. Access to Transactional and Behavioral Data:
When consumers have bought into the benefits of a loyalty program, their loyalty ID is attached to their transactions, which provides individualized data on their actual purchase behavior. In addition, the benefits of loyalty programs can also be a driver for consumer opt-in to email, providing an understanding of what information is relevant and engaging to that consumer by looking at the open and click through rates.
3. Vehicle to Request Additional Data:
As your brand continues to grow by enhancing its products or services and/or entering new territory, you may realize that you have additional data needs. Loyalty programs provide access to an engaged population that can be easily tapped into to gain the data gap. Gaining that information can be done in a fun, engaging way through personality tests and gamification.
Opportunities for Data Collection with Promotions
A loyalty program is not always the right fit for every brand. Brands can also gain access to first-party data through promotions.
For instance, General Mills recently digitized its Box Top for Education program. Participants no longer need to cut out the tops of cereal boxes and send them in, they can now scan their grocery receipt into an app to donate to their local schools and to enter to win a school makeover. By digitizing this program General Mills will gain access to the email addresses of participants and an understanding of what other items its consumers purchase when grocery shopping, allowing the brand to learn more about its customers’ eating habits.
Proctor and Gamble has also been focusing on building its first-party data and recently stated that the consumer brand manufacturer now has millions of unique customer IDs. The company has likely achieved this through tactics like Hair Code, which is a personality test to find the right products for your hair. This personality test provides information on the consumer’s ZIP code, the activities they do, the type of hair they have and the type of products they would be open to and provides the consumer’s email address and permissions to email them about Proctor and Gamble products.
Conclusion
As seen in these examples, first party data may not be as elusive as it is perceived. You can gain access to this information and engage your consumers at the same time through loyalty programs and promotions. It simply requires an understanding of what data your brand needs and a little creativity about implementing loyalty and promotions in a fun, transparent way.
HelloWorld specializes in loyalty marketing services. It is a subsidiary of performance marketing agency Merkle.
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