Loyalty programs themselves are nothing new. People have been signing up for store loyalty programs to receive discounts and personalized offers for decades. But internet saturation has allowed loyalty programs to reach an entirely new level in terms of personalized consumer marketing.
Consumers, in general, accept retailers and brands collecting data about them, but they definitely expect something in return. For one thing, they don’t want brands and retailers collecting more data than what is strictly necessary for their purposes. For another, they expect that data to be used to personalize the shopping experience, whether it takes place in a store or online.
Personalization Increasingly Important with Each Successive Generation
The desire for a personalized shopping experience increases with each younger generation. Most baby boomers have a keychain full of mini loyalty cards to be scanned at the retailers they frequent most, but as you research younger generations, you realize that the younger people are, the more they expect their experience to be personalized. They don’t just want instant discounts from their loyalty program status; they want offers that are designed just for them. They want to know about newer products that they might like, and they want to interact with loyalty programs online and on their mobile devices. Older shoppers may want this too, but as you skew younger, you realize that such personalization is increasingly expected.
Potential Problems with Personalization
Personalization in consumer marketing can present challenges, however. First of all, how does a brand or a retailer initiate a loyalty program? Obviously, data is everywhere, but how do you go about collecting it, and what do you do with it once you have it? How do you coordinate a loyalty program across keychain tags, your website, and your mobile presence so that the experience is seamless across channels? And perhaps most importantly, how do you ensure that the consumer data you use in your loyalty program is “clean,” i.e., as accurate, complete, and current as possible? Consumers expect that if a brand or a store collects massive amounts of data on them, that they will provide services and products that resonate. And they’re annoyed if that doesn’t happen.
Steps to Personalized Consumer Marketing
The practical and technical steps of implementing or upgrading a loyalty program can be done by any number of service providers who know how to make the nuts and bolts of a loyalty program work. But it’s important to have a multi-pronged strategy in place before implementation. Specifically, you should:
- Change your focus from “buy our products” to “achieve your goals”
- Use data in ways that help you understand actual customer needs
- Make an emotional connection—through sustainability and social responsibility initiatives, for example
- Show that you understand individual customer needs through your messaging and engagement with each customer
What the Future Holds for Personalized Consumer Marketing
The future of loyalty programs is likely to involve merging of the online and in-store experience, and some retailers are already doing this. For example, some stores make it easy for in-store customers to identify products and order them on the spot, right from their mobile devices. Others are installing in-store beacons that can beam special offers directly to customer devices while they’re in the store. Other methods of personalization may be less data-based and more oriented toward making the shopping experience better, for example, by allowing personalization of dressing rooms with lighting and music choices.
Personalization is an intricately choreographed dance between the consumer and the brand (or product), and doing it right means understanding what the consumer wants you to do with the data and using it responsibly and in ways that make their lives easier. Hangar12 is at the forefront of CPG marketing strategy and more. Subscribe to our blog to stay up-to-date with our latest insights.
Topics consumer marketing