By combining retail loyalty marketing with thorough data analysis, retailers can efficiently improve communications and business practices simultaneously.
Having recently survived another frantic Christmas period, many retailers will no doubt be looking forward to a slightly slower pace throughout the opening month of 2014, making now the perfect time to reflect.
Throughout peak promotional periods, such retailers collect large quantities of consumer data from a variety of places. In pairing marketing activity and loyalty programs with such data initiatives, these companies can look to significantly improve their business.
David Blakers, Executive General Manager for Salmat Digital believes that this way of thinking should be fundamental for any retail enterprise regardless of which channels they operate in.
“By using fundamental data analysis techniques in partnership with a holistic loyalty marketing program, retailers can achieve greater customer engagement, as well as loyalty in the form of repeat visitation, repeat purchases and, ultimately, a greater share of wallet,” says Blakers.
“A targeted loyalty program helps trigger a key driver of purchasing behaviour by enabling customers to stand out amongst their peers by identifying with an exclusive group.”
While ‘Big Data’ has garnered plenty of attention over the past 24 months, retailers shouldn’t think of data analysis as a new thing. According to Blakers, many of these practices are as old as retail strategy itself.
“Loyalty schemes have been a core part of retail strategy for many years and have always been used to derive insights from the data that’s returned. It’s only in recent times that the practice of data collection and analysis has really had a spotlight shone on it as a result of concerns regarding big data collection and usage.”
The principles of data analysis apply whether youâ??re an SME business or an enterprise-level retail chain with 100 times the amount of data, Blakers explains.
“No matter who you are you need to have some kind of customer engagement strategy that allows you to stimulate buying behaviour by delivering value to your customers. Once a strategy is in place, it will dictate the type of customer data that a business needs to collect to enable them to deliver more targeted and relevant customer communications.”
Retailers will have access to many different data points for the purposes of this kind of initiative, and a thorough strategy will incorporate as much information from as many places as possible. Below are a few examples of the kinds of data available.
Types of Data Collected:
“Combined, this information allows businesses to start creating a very powerful picture of how consumers interact with them and how to improve their offers,” Blakers says.
There are also a broad variety of loyalty marketing campaigns a retailer may create as part of their overarching program. In this case, Blakers says that the majority of campaigns should be automated in order to reduce the amount of resources required to keep them running.
“This usually means there’s a large portion of resources and effort in the planning and preparation phase,” Blakers says. “Once they’re set up, it leaves the retailer open to optimising them on a regular basis. Then there might also be a number of larger, more intensive campaigns that may be seasonal in nature. The business then needs to use an ongoing test, learn and refine methodology across all campaigns to succeed in the market.”
The beauty of taking this approach is that retailers that derive the most accurate insights from their data are able to immediately use this information to improving the efficacy of their marketing and other business practices.
This doesn’t mean, however, that retailers can take their customers’ data for granted. In fact, there are a plethora of cases where businesses have mishandled this information, resulting in negative sentiment and lost sales.
These sorts of issues usually occur when a retailer collects sensitive information without informing customers or providing a way of opting out, or when such data is shared or exposes to third parties without the customer’s consent.
“People are happy giving some of their personal information away as long as they’ll see a benefit. What they don’t like is when that information is shared or abused in any way. As long as every business maintains some basic principles around how they treat customers, maintain their data and deliver value to their customers, they will drive greater customer loyalty.”
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Campbell currently serves as Editor for Power Retail. He has a background in science communication and a long history in retail. Campbell has a keen interest in emerging technologies and their impact in the world of media and online retail. Campbell is an indoor sports junkie, to the point of playing in a local dodgeball competition once a week, â??just for kicksâ?. Follow Campbell on Twitter, Google+ or connect with him on LinkedIn.
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