Thanks to Jennifer Dawson for sharing the following:
The cost of running a loyalty program could amount to as much as five percent of your total sales according to an article by KPMG Principal Katherine Black. That is, by no means, a small number. And to make matters worse, just because you have some sort of program in place, it doesn’t automatically mean that your repeat business and total sales will go up. For the whole thing to work, you’ll need to make sure your program is able to form some kind of emotional connection with your customers—and it all begins with proper customer data collection and processing.
What type of data is needed?
Aside from the basics like the customer’s name, age and overall demographic, successful customer loyalty programs also require information on your customers’ product preferences and purchasing habits. But this is just the data you collect at the point of purchase. You also need to keep track of what customers are saying about you and your product once they leave your store. In a way, this is a better method of getting honest opinions because the customers would no longer be under any pressure to be polite.
A great way to do this is via social media. If you already have a Facebook page for your brand, then either turn on the reviews feature for it or use it to encourage customers to contact you for feedback. In addition, you could also visit any e-commerce websites that carry your products and check the reviews there. Finally, you could do a quick Google search for your product as well to see if there are any other reviews that you might have missed.
How can customer data help?
But how does collecting all this data help make an incentives program more effective? Well, by understanding what your customers want and need, you can easily tweak the rewards that you’re offering accordingly. This will instantly make your program much more appealing and relevant—which will ultimately not only drive existing members to buy more to earn more points, but also entice even more customers to sign up. Needless to say, the more members you have, the more valuable information you can collect.
More data = better loyalty
Simply put, the first step in running a successful loyalty program is getting to know your customers. Keep in mind that unless your rewards are relevant and exciting enough, they won’t really do anything to increase your profits. At the end of the day, the better you understand your customers, the more effective your loyalty program becomes.