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Loyalty trends and best practices

5 Technology Trends Driving Engagement-Based Loyalty

by Geoffrey Smalling
February 23, 2017
5 Technology Trends Driving Engagement-Based Loyalty

Loyalty programs continue to proliferate, while customers’ expectations continue to evolve. Program innovations are more important than ever, facilitating new ways for brands to focus on delivering seamless experiences when and where their best customers want them.

In 500friends’s recent webinar, Geoffrey Smalling, CTO of 500friends, a Merkle Company, spoke about innovative ways, outlined below, that technology can facilitate collecting loyalty data to create experiential moments, keeping your loyalty members engaged and driving deep consumer value.

Loyalty’s Focus Today: Driving Program Effectiveness

As consumer behavior shifts and fluctuates seamlessly between ever-evolving online and offline channels, marketers are under increasing pressure to leverage member data to drive a personalized experience, establishing long-term relationships based on their behavior and preferences. Like a closed loop cycle, member engagement produces more data, yielding insights and enabling brands to create experiential moments and interactions that hopefully will trigger more member engagement.

The five trends below are ways brands are driving effectiveness and engagement of their loyalty program, allowing program managers to balance the fine line between meeting ever-demanding business objectives while simultaneously connecting with their customers beyond a purchase.

Trend Breakdown

TREND 1: OPTIMIZED MEMBER PROFILES
Technology Snapshot: Integration of CRM and Loyalty Ecosystem

Traditionally, loyalty programs were used for retention marketing and acquisition was treated separately. However, as loyalty programs become a more robust 1st party member data depository (beyond just linking transactions) for many brands, they are able to identify high-value customers through attributes observed in member purchases, preferences, and demographics.

Impact on Landscape

  • Brands will seek to drive loyalty program acquisition strategies as pivotal ways to capture member data and build member profiles.
  • Acquisition campaigns will include social connection opportunities, which will influence demographic profile data and other non-purchase engagement.
  • Programs will be empowered to determine high-value member attributes from which can be integrated into look-alike models to identify similar segments to attract into the program.


TREND 2:
 PERSONA-BASED REAL-TIME LOYALTY MESSAGING 
Technology Snapshot: Integration of CRM, DMP, and Loyalty Ecosystem

Loyalty messaging traditionally occurs based on triggered behaviors (such as transactions, enrollment, etc.) across email and occasionally occurring days after the event. Messaging is now moving to real-time to ensure relevancy. Instead of single triggers, personas are being built from the collection of transactional and non-transactional data (such as demographics and preferences) to better understand member incentives. Offers and promotions are then prioritized to each segment.

Impact on Landscape

  • Loyalty programs will be targeted and personalized for each persona rather than a “one-size-fits-all” model. This will create a tailored experience for each type of member and increase engagement rates.
  • Loyalty programs will need the platform support to synthesize both 1st party and 3rd party data to be able to properly and accurately build an enhanced view of members for each segment.
  • Brands will need to create an experience that is integrative across all channels of engagement, elevating the overall brand experience for members.


TREND 3: NON-TRADITIONAL ENGAGEMENT
Technology Snapshot: Social Listening

The increased use of social listening tools provides brands the opportunity to track and react to users currently using the brand #hashtag. Not only will social listening tools help identify those that are already active with the brand, it will enable the brand to collect member data and have a dialogue with members with hopes to drive social content creation and curation.

Impact on Landscape

  • The use of social listening will become more prevalent and will fuel better 1st party member data collection.
  • Increased engagement via social content creation provides a forum for leveraging social data to drive personalized engagement offers beyond the transaction.
  • Brands that continue to invest in an integrated experience through technology are able to reach consumers at the moments that most influence their decisions, yielding a positive impact on the bottom line.


TREND 4:
 LEVERAGING INNOVATIVE “LOW BARRIER TO PARTICIPATE” LOYALTY CHANNELS
Technology Snapshot: Online “Bots,” Mobile Wallets, and In-Store Clienteling

Today, loyalty programs are using more traditional communication channels, such as email and mobile, to communicate with hyper-connected members. Brands are seeking new channels that drive more of a conversation platform with always on-the-go members. Examples of these channels include online “bots,” mobile wallets, and in-store clienteling.

Impact on Landscape

  • Programs will add new channels to try to better connect with members at different times and with limited friction for the member.
  • These channels will be used to deliver real-time offers and collect engagement information on members.
  • Traditional communication channels such as email will continue with a reduced focus.
  • Mobile wallet and bot usage, as seen with Starbucks, Sephora, and H&M, will be prolific in the retail and travel industries.

 
TREND 5: GLOBALIZATION
Technology Snapshot: Mobile technology, Social listening, Low Barrier Loyalty Channels, Integrated Loyalty Ecosystem

Recent trends of mobility across geographies, transparency of eCommerce, and a desire for a globalized brand image has helped to flag the need for a global customer experience for brands, inclusive of a consistent loyalty experience.

Impact on Landscape

  • Brands will need a global framework for their loyalty programs, combining quantitative metrics and qualitative observations to create a geo-specific loyalty program that communicates one brand and one message.
  • Digital expansion is providing the tools and techniques to reach a global audience.
  • As many key market segments exist in different geographies, starting with commonalities between markets and user experience facilitate balancing global scale with local customization.

 
Loyalty of the Future: Connected Loyalty

So, what does this all mean? For brands and marketers to be successful, it is imperative that they focus on the consumer, creating meaningful moments that touch on the emotional ties that consumers have to brands, in both the traditional and new-to-market channels that they are using. In support of this is the need for innovative technology to help streamline the new channels, partnerships, and data flowing into the loyalty program. It isn’t about targeted marketing, but rather one-to-moment marketing and creating ubiquitous ways to collect valuable consumer data. The shift to focusing on Connected Loyalty is about the ability to collect, analyze, and act on the rich web of data that is available. Customer-obsessed brands who embrace true Connected Loyalty, will come out ahead of the game.


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