Evaluating your retail loyalty strategy for 2021? You work tirelessly to ensure you deliver the right product, services and experiences to earn your customers’ loyalty. Your budgets may already reflect these initiatives, but you know there’s always more to do.
As a retailer, you know the value of having loyal and engaged consumers. You work tirelessly to ensure that you deliver the right product, services and experiences to earn their loyalty. Your budgets may already reflect these initiatives, but you know there’s always more to do.
This article identifies 5 methods to consider when planning for change within a loyalty strategy. While you are reading, be prepared to reflect on your current plans within the workspaces provided and to draw from the advice, examples and applications outlined.
Find 5 methods in this article to transform your engagement strategy. Learn from in-market examples and applications that helped enterprise retailers deepen consumer loyalty. Read on this article and reflect on how you can improve your loyalty strategy boosting consumer loyalty and engagement.
Table of contents
Know your consumers. Know yourself.
With the wealth of consumer data available – what they buy, when they buy, how they rate your brand – you have access to information about what they value. With that access, you know what you should offer and how you should offer it to maximize a welcome engagement opportunity. Your consumers want to be seen. Do you see what is important to them? Is it savings, points, experiences, prestige, access, exclusivity or all of these? Do you know when and how they want to be seen and are you serving them in the right channels?
- Offer consumers reward choice and control – Balance savings and points against other benefits like access, experience, status and exclusivity to ensure you have the right combination of rewards that your consumers value. This will encourage better program uptake and reward redemption, improving consumer engagement with the program and your brand.
- Enable omnichannel engagement – Consumers are no longer single-channel shoppers. The buyer journey often starts in one channel and finishes in another. Use your Loyalty programs as a valuable data hub to connect the channels creating unified member experiences, communication cadences and promotion relevance.
A national retail pharmacy group saw their consumers simultaneously as patients and caregivers who need access and personalized support in their health and wellness journeys. As part of a global healthcare ecosystem, they knew they could establish an integrated journey in-store, online and in-app in support of a personalized experience valued by their consumers. To execute against their loyalty vision, Exchange Solutions helped them launch an omnichannel loyalty program designed to make health care easier and more rewarding for their patient-customers. Not only does the program integrate a personalized journey through offers on everyday health and wellness products available on the shelf, but it also incorporates rewards and broader access to the personalized relationship each consumer needs with their trusted pharmacist.
How well do you know what your consumers value? As an organization, how are you prioritizing and responding to those needs? What consumer behaviours are valuable to you? Cross-team, how do you measure those values and their impact on your business goals?
Be the Expert. Trust the Expert.
No one knows your retail business like you. As you own your field, the right vendors and partners own theirs and should be leveraged as a complement to your business. Do you trust that your technology partners understand and lead in the right areas, such as loyalty, personalization and engagement? Do your partners appreciate your insight about your industry, your consumers and your business objectives? Are you open and connected to the right experts so that together you can achieve your loyalty and engagement vision with a diversity of perspective?
- Form strategic partnerships – Broaden the appeal and earning power of your loyalty program while still ensuring your data and program ownership. One emerging trifecta of partnerships: Gas + Grocery + Pharmacy brings together those respective and complementary experts to strategically grow market share for one another.
- Audit your technology portfolio – Enable integrations among the right vendors and marketing technology platforms to leverage their program design expertise and optimization services. Use data shared across those connections to enrich loyalty member profiles, enable better personalization and achieve deeper engagement.
- Apply a SaaS/Managed Services hybrid model to your day to day operations – Not only should you leverage your vendor’s experience through managed services, but you should also have access to everyday actions and learning through SaaS tools your own team resources can control on demand. The right vendor should offer options that fit the way you need to run your business, rather than telling you how you must run your business.
Our clients inform us of their business objectives and what consumer behaviours are most important to their business. Together, our teams defined personalized offers that would reward consumers only if these behaviours were completed. The offers were presented with the right amount of incentive to reward consumers for:
- subscribing to email and becoming contactable for relevant messaging,
- downloading the app for more routine engagement,
- and increasing spend to become higher-value consumers.
Collaboration efforts should always have a goal to serve the end consumer, keeping them engaged and earning their loyalty.
As an expert in your industry, identify an emerging consumer need, you must meet to remain the top choice against your competition. Next, picture the first discussion with your team and partners, are they excited by this big idea and adding value to help you innovate?
Launch It. Don’t Wait.
The idea of a broader launch can either propel retailers to action or, incite fear. Is your organization willing to launch the minimum viable program, then learn? Push your way through the discomfort of getting it perfect and aim instead for progress. Launching to the general public means you’ll gain larger amounts of consumer feedback, associate feedback, vendor input, industry critique and more – all of which will help you understand at a grander scale what’s working and what can be improved.
At your organization, who owns gathering and analyzing post-launch feedback? How often and how easily can you make changes to your initiatives and programs?
- Pioneer new opportunities – Investigate emerging trends and how they can serve as new channels or experiences in which to engage with your consumers. Are enough of your consumers interacting in these spaces already? If so, be the first to offer them if possible, or at the very least be the best in the longer term.
- Use SaaS tools to your advantage – Get in the driver’s seat and apply change faster. Platforms should empower teams to make a change, allow businesses to operate their programs independently at their preferred pace, and implement larger, broad-scale enhancements quickly and intelligently.
Test and Learn.
Create an opportunity to test, to fail and pivot fast, learning from new information that becomes available. When your organization is closed o to the idea of learning from experiments and innovation, can you still say you are ready to grow with your consumers? Get comfortable with hypothesizing, executing, analyzing and adjusting by implementing small, controlled pilots. When building your test strategy, leverage your vendor’s SaaS tools for straightforward tests and their managed service expertise for more complex scenarios.
- Invest in better loyalty promotion targeting – Test applications of advanced analytics and learn from them in real-time. AI-driven personalized offers give you a wealth of learning that should be simple to interpret and implement.
- Run your program as a profit centre, not a cost centre – the right tests, especially regarding offers and benefits, should create a win-win for both your business and the consumer long term. Focus on optimizing the exchange of value with your consumers ensuring loyalty promotional spend is driving incremental & profitable behaviour, as opposed to rewarding consumers for behaviour they would have performed anyway.
A national retailer partnered with Exchange Solutions to improve consumer engagement and optimize promotional spend. During a pilot for personalized 1:1 offer presentment, the performance was improved after testing a few different aspects of offer execution:
- Creative and content adjustment, which drove better offer engagement and higher acceptance rates
- Eligibility criteria were narrowed, which shrank offer exposure but was made up for by increased basket sizes.
- Incentives were optimized to protect margin and presented as ‘$ off’ instead of ‘% off’. This improved consumer conversion over other more expensive promotions that delivered less return on promotional spend
Think of one initiative you want to implement related to earning consumer loyalty and improving consumer engagement. Then identify what blocks you from testing this in the market. Lastly, identify what or who you need to unblock this change. Are there other initiatives you can think of in this framework?
Evolve and thrive.
The program you launch should not be the same program you’re operating one year later. Retailers who succeed at earning consumer loyalty and continuous engagement accept that strategies and tactics must evolve to keep up with a changing retail landscape. How else do you continue to align your oering with what your consumers value if not by adopting a growth mindset to stay relevant?
With time in the market comes learning and if you‘ve laid the right foundation, it shouldn’t be painful to access that information and gather evidence to help you make decisions about what to stop, start and continue as you execute against your loyalty strategy.
- Give and take the room to grow – Regularly assess your program for what is going well and what can be improved. Use the metrics for consumer engagement to determine what needs to be optimized:
- Seeing <25% of your loyalty members earn rewards? This could mean low engagement with your program. If it’s too high, you might be over-spending – look closer at how much value your business is getting in return for your reward spend.
- Yearly breakage >15% and rising? If you’re expiring >15% of points, this may suggest weaker reward value. It also may mean your members aren’t engaged enough to use their points – audit your portfolio and test redemption options that are more appealing to your consumers.
- Leverage vendor expertise to help you through your evolution – Ensure your enhancement roadmap aligns with your vendor’s innovation plans. If they don’t, work with your vendors to come together on expectations, which should alleviate some of those pain points that may get in your way.
Today is Day 1. Reflect on how your organization is currently set up to measure and earn consumer loyalty and engagement. What areas do you see evolving in Years 1, 3 and 5? What do you need to stop, start, or continue? Who do you see owning these areas of growth and change?
Circling back to our original premise that loyalty is an exchange of values between retailers and their consumers, end this exercise with a reflection on these questions:
- What do you oer that consumers value: savings, rewards, experiences, access, prestige? How do you know they value these?
- What do your best consumers do that you value and wish all your consumers would do as well?
- Are you ready to transform your loyalty strategy?
As you moved through this guide and took time to reflect on your current loyalty strategy, we hope you found value in the insight and advice we’ve shared.
Are you ready to share some of your answers? Have you uncovered more questions? Have you determined you need more help navigating this journey of transformation?
Source: Exchange Solutions