By Punit Kulkarni, Symphony Analytics
While it is true that customer loyalty programs have revolutionized the way retailers engage with consumers, initially, loyalty programs were designed only as a data capture mechanism to drive a company’s marketing efforts. Some programs evolved and became more relevant by examining customer demographics and transactional behavior, and today, these programs are morphing once again in an attempt to connect with their customers on an emotional level. The challenge is that the information required to do this has historically been hard to find and very expensive.
In order for marketers to be reactionary at an emotional level they need data that reveals more about consumers than can be gleaned from simple transactional data. To gain these insights, marketers have to change how they engage with customers in each moment to make the engagement frictionless and experiential.
For example, analyzing a consumer who makes a $120 purchase of shoes in a specific category tells us little about what he/she was actually looking for, what he/she does for a living or what led him/her to make this purchase. If marketers could see the digital footprints of such a consumer, they would see that, for example, the consumer visited a health article on a news website, then did a Web search about ways to get in shape, then made a visit to a Web forum of Nike fans and ultimately a visit to Nike.com to purchase a pair of running shoes. Each of these interactions impacted the decision to buy that pair of shoes. Tracking these steps that led the consumer to the shopping cart, would enable a marketer to identify several touch points at which they could influence customers to get them to the same destination – the shopping cart.
Although the challenge today is in creating these Digital Marketing Currents and linking them to a predictive purchase path, below are ways in which best-in-class retailers and marketers leverage digital channels to trace such footprints, influence behavior and drive customer loyalty:
Create a robust digital platform: A digital engagement framework, which can consist of any combination of web crawlers, social media monitoring tools, an analytics-driven website and mobile app, and an analytics center of excellence. This is the place where all digital channels will converge and will serve as the enablement of all digital strategies.
Embrace your new digital consumer: Be it awareness, consideration, purchase, or post purchase, consumer touchpoints become available and fade away. And, it is in these windows that consumer engagement, regardless of source or shape, affects a customer’s next steps on the purchase path. Video uploads to YouTube, ‘Likes’ on Facebook, customer responses to a market research survey, or mobile phone application usage all enable marketers to connect with consumers on an emotional level.
Personify social identities: For years, retailers have “known” their customers based on what they purchase. As a grocery retail marketer would say, “you are what you eat” or an apparel marketer would say “you are what you wear.” That is no longer enough. A more holistic view of your consumer is required, which informs you about their aspirations, lifestyle and interests. You need to interact with your customers when they're not only in your store and capture these key insights into their “social” identity. To that end, a customer is no longer a “loyalty card number” in your marketing database. That customer is your Facebook friend, a twitter follower, a Pinterest fan and sometimes even a guest blog contributor.
Make digital channels emotionally intelligent: There are infinite opportunities to harness these insights in a way that results in better customer engagement. The key is to capture the data, churn that into actionable insights, and instantly respond to the customer with rich and relevant content. By integrating machine learning algorithms into your website or your mobile app, it can be trained to respond in a way that will positively influence consumer behavior.
Test, learn and iterate: There is not one key to unlock optimum digital engagement. It is a complex function that needs to be maximized under variable constraints like customer demographics, message relevance, seasonality and UX design. One of the easier ways to improve digital experience is to employ “test and learn” feedback that loops into your digital design. Don’t be afraid to test your digital strategy as long as it is backed by insights from real time customer responses.
Although customer loyalty has been traditionally driven by a transactional reward system, today’s digital customer is looking for instant recognition and gratification. To create and drive digital customer loyalty, marketers need to do more than just rely on transactional data or digital ad strategies. With a greater understanding of who your customers are, how they behave and why, as well as knowing what recommended actions can be taken during the next interaction, digital marketers can create a “path to loyalty” for their digital consumers to follow.
Punit Kulkarni is director of marketing for Symphony Analytics, a division of Symphony Teleca Corp. Over his career, Kulkarni has helped Fortune 500 retailers build customer loyalty programs, business analytics and customer relationship management. He has also consulted for world-class enterprises in business growth and go-to-market strategies. He can be reached at email@example.com.