In an increasingly competitive retail market saturated with options for consumers to choose from, there’s one question that you as a retailer should always be asking yourself: What can I do to improve customer loyalty?
If you’re a retailer with an existing customer loyalty program, you’re on the right track – but you may be wondering what’s next or are looking for ways to improve and amplify your program to see more success. You may even be working for a retailer that doesn’t have a customer loyalty program yet and you’re thinking about how you can start one. Whether you’re a program expert or a newbie, you likely have the same end goal: loyal customers. How can you reach that goal? By creating a loyalty roadmap based on a clear and honest assessment of your data and analytics capabilities.
Building the loyalty roadmap
Exactly what is this roadmap? How do you create it? And where do you start? Keep reading to see how Global Solutions goes about designing a loyalty program with an analytics assessment approach, and a real-world example of how we implemented this approach successfully with one of our clients.
Start with analyzing your data and analytics capabilities
Whether you’re designing a loyalty program for the first time or looking to optimize your existing program, it’s best to start with an honest analysis of your current state. This analysis should consider two main areas:
- Your customer data
- Your organization’s analytics capabilities
The goal of this analysis is to determine how well you know your customers based on the data you presently have and determine how well equipped you are to capture and process customer data strategically moving forward.
Here are some common questions that are asked during the assessment:
- Who’s your next best customer?
- What data do you have about your customer? I.e., transactional data, demographic, third party?
- What is the level of detail and how far back does your data extend?
- Can you combine your data with the rest of your organizational data?
- Where is your data stored?
- Who is your best customer and what behaviors differentiate them?
- Program analytics: Do you know how healthy your loyalty program is?
- Customer analytics: Are you able to segment your customers? What methods do you use?
- Promotional analytics: Do you know what promos/offers work best for your customers? (Effectiveness of promotional campaigns, etc.)
- What technology/tools do you use to access, store and secure data?
- What is the level of complexity of your existing processes and methodologies?
- Are the right people in place with the right skills in your organization? (Data science, data engineering, data analysis and data visualization, etc.)
Insights-driven program design
With the assessment complete, we can use the results from the assessment questions as insights to inform your loyalty program roadmap. The insights from the assessment help us uncover the potential feasibility for new opportunities – like cross-selling high-margin shoppers who typically only shop in one category. If a specific new opportunity isn’t currently feasible, we can then determine what capabilities and investments are required to capitalize on these opportunities, and ultimately enable the most success from the loyalty program design.
Global Solutions also uses the assessment to help identify areas where you may need to invest in analytics technology and how to use your capabilities to nurture more customer loyalty. We then provide a roadmap for those analytics investments and guide you through the process of making your upgraded technological capabilities work for you, in a way that directly aligns with your loyalty program design and rollout.
Bringing it all together
Here’s how we helped our department store client assess their analytics capabilities and create a roadmap that provides real loyalty results:
A leading South American department store chain was facing challenges with its loyalty program, including:
- An inability to access data in a timely way
- A knowledge gap in measuring promotional effectiveness
- Difficulty in properly embedding loyalty into its corporate strategy
Working closely with the retail chain, Global Solutions helped them close these gaps by providing guidance on strategy, best practices and measurement methodologies customized to meet their needs. We began by assessing their current analytics capabilities to see how effectively they could measure and target promotions and understand their customer base. We also examined the processes they had in place to prioritize projects and create data-driven decisions within the business.
We helped the client identify areas of improvement that would allow their loyalty program to support their overall company strategy. This included providing recommendations for process changes, removing technology barriers, building a test-and-learn roadmap to prioritize work, building a program impact measurement framework, and embedding data-driven decision-making into the retailer’s promotional and customer strategy.
Based on the roadmap as well as analytics best practices and data science methodologies provided by Global Solutions, the client was able to accurately measure different types of promotional campaigns and measure the ROI of their entire program. Additionally, as the client was building their data capabilities, Global Solutions was able to provide tactical analytics support to review their results and help troubleshoot their modeling.
Taking an honest look at your current analytics capabilities can seem daunting, but once you understand where to start and the areas you need to improve, you’ll start seeing real customer loyalty. Getting more value from your customers is a continuous evolution, so the sooner you set up your organizational infrastructure for strategic use of data, the better equipped you’ll be to assess and adjust your strategy going forward.
Let’s get started.
Ready to start building your loyalty program roadmap? Have more questions for Francis? Check out some of our related content below or get in touch here.