Data analytics can augment Customer Loyalty Programs and drive your company's growth trajectory

The author of New York Times bestseller, The Sales Bible, Jeffrey Gitomer, famously wrote another book titled "Customer satisfaction is worthless, customer loyalty is priceless." In his book, he advocated customer loyalty over customer satisfaction. His argument was straightforward. He claimed that even if a company is registering 97% satisfied customers, 3% are still free agents. They might be happy with the product at the moment, but they are continuously on the lookout for better alternatives. This is where Customer Loyalty Programs come into the picture.

These programs are mainly designed to heighten customer retention and engagement. However, the question is, how can one determine if the loyalty program they are using is functioning correctly or if it needs to be improved? If yes, how can one enhance it? The answer is with Big Data Analytics.

Against this backdrop, here we have listed two critical ways through which data analytics can augment Customer Loyalty Programs and drive your company's growth trajectory:

1. Leverage data to curate programs accordingly

Customization is the key to unlocking a customer's heart in today's era. Know your customers and target group by analyzing them through different data types. This includes demographic data, purchase history, and behavioral data. While demographic information marks the beginning of the personalization journey, the purchasing account helps gauge customers' buying behavior. For example, purchase history can give companies insights into whether the customers prefer organic or vegan products, baby products or adult products, and unhealthy snacks or health supplements.

This enables companies to understand the distinctive preference of their customers and categorize them into different categories. Similarly, behavioral data helps organizations analyze if the customers like to discuss what to buy on social media or post reviews and comments. It also helps them understand if the customer is happy, upset, or moderately satisfied with the company or its facilities like home delivery or whether the application or website is easy to maneuver.

Once you have collected all this information, you can design rewards, discounts, and more relevant offers for your customers. To give you an idea, suppose a customer likes to buy organic products in bulk every month, you can offer them some discount or similar organic complementary products. Handing out extravagant rewards like discounts on hotel or ticket accommodation, if you know your customer likes to travel a lot and stay out of the station, can work wonders for your brand value. It will automatically attract customers and increase your sales dearly.

2. Analyze the effectiveness of the Customer Loyalty Program

While it is essential to make your customers happy and satisfied by rewarding them from time to time, it is also crucial to know if your loyalty programs are working or not. You can also leverage purchase history and behavioral data to understand why some customers redeem rewards and reach the next level, but others do not. For other customers, you'll again have to analyze their shopping behavior and other related data and offer rewards as per their needs. Remember, it might be possible that introductory discounts and offers might not please or work on every customer. Suffice to say, general creation and design of rewards and values won't help businesses convert every satisfied customer into a loyal one.

To analyze the effectiveness of your Customer Loyalty Program, you will have to analyze the post-rewards behavior of your customers. But make sure you choose your datasets meticulously to get accurate results. Including customers who have been loyal to the program for just close to one month can hamper the precision of your study.

In a nutshell

Gone are the days when customer loyalty was rewarded generically. For instance, most customer rewards were subjected to purchase history. Once customers reached a set threshold, they were rewarded with some discount. However, all these discounts, offers, or rewards are old news and aren't sufficient to cater to the personalized needs of modern-age customers. Today we can take a different and more customized route to ensure consumer loyalty. A perfectly curated loyalty program can help businesses retain customers while attracting new customers. The Customer Loyalty Program integrated with cutting-edge data analytics, if executed correctly, can take a company's profits to new heights.

Data analytics can provide substantial coherence and precision to Customer Loyalty Programs by harnessing the power of customers' online or offline behavior and other related information. Companies and organizations leveraging this technology have an edge above their contemporaries in amplifying business output. Others who have missed jumping on this bandwagon will be at a disadvantage in days to come.