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  • Writer's pictureTom Fuyala

White Paper: Building a Data Forward Retail Loyalty Initiative

We've just released a new white paper titled 'Building a Data Forward Retail Loyalty Initiative' and if you are a retailer with a loyalty program you will likely want to read it.

Intended Audience and Purpose

This white paper is written for executives at multi-store retailers with a customer loyalty initiative in place, who are interested to increase the program’s ROI through leveraging the data generated by the program for greater customer insight. It will be of particular interest to those who feel that they are at an impasse in terms of advancing their data and insights capabilities at a pace commensurate with the needs of the business.

Intended Audience and Purpose

Many retailers are sitting on operationally functional customer loyalty initiatives, some are brand new programs while others are recent reboots of established programs. Customers are happy, large volumes of data are being collected and stored, and life is ostensibly good.

It’s not uncommon that at some point there arrives a realization that a loyalty initiative without high utilization of the generated data is nothing more than an extremely expensive exercise with minimal actual contribution to business growth.

Loyalty programs are expensive endeavors which often fail to deliver improved business performance. The data collected by a loyalty program has the potential to be a business’ most valuable asset – driving customer engagement and business growth. In this paper we discuss the potential to transform business performance by infusing loyalty data holistically into every corner of the retailer. This is the essence of being data forward.

“The important thing to remember about loyalty programs is that most are just a “me, too” way of reducing profit margin. Once all the major players in a space offer one, it’s just a bribe for doing business with a particular restaurant, store, airline, or product consumable. In contrast, the best practice loyalty programs are the ones that offer a reward in exchange for ongoing customer information (shopping basket data, preferred services and routes) and then use that information to serve a customer better than a company that does not have that information.”

‘Managing Customer Relationships – A Strategic Framework’

Don Peppers & Martha Rogers

The above quote from the seminal customer relationship management book Managing Customer Relationships (Peppers & Rogers) is as true today as it was in 2004 when first published. The purpose of this white paper is essentially to give consideration as to how retail businesses can be better positioned to ‘serve a customer better’ as opposed to ‘bribing’. In a retailer of any scale, this will almost exclusively be an ongoing data and analytics exercise, hence the importance of data forward.

Loyalty programs run a wide gamut of sophistication from simple punch cards (‘get your tenth coffee free’) through to sophisticated mobile app end-point interactive technology solutions. The common objective for all programs is obviously to bring positive business outcomes to the retailer. The larger and more sophisticated the retailer the greater the expectation that the focus will be on customer insight and understanding rather than on the bribe.

It should be noted that even a sophisticated data forward loyalty initiative will still have an interest in the bribe component, but only in so much as interpreting and understanding which specific bribes do the most effective job of influencing shoppers to achieve certain outcomes.

In this white paper we explore options when looking to transform towards a data forward retail loyalty initiative. We will be touching on some complex topics, if you are interested to talk through any of these concepts with us at a deeper level you are welcome to contact 11Ants at any time.

Some of the things we cover off in the white paper:

  • The connection between retail customer loyalty initiatives and market orientation.

  • What is a data forward retail loyalty initiative?

  • Benefits of a data forward retail loyalty initiative

  • Categories of loyalty data.

  • Ideal state of an analytics data asset.

  • Challenges to leveraging the loyalty data asset.

  • Three pathways to improving things.

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