What can today’s loyalty technology do for you?

By March 17, 2020 March 25th, 2020 CCG Retail Marketing Blog

See how innovations in customer loyalty software and other technology can help you overcome modern retail marketing challenges.

Loyalty Technology Innovation

Article Highlights

  • Today’s loyalty technology provides better ways to integrate customer data from disparate sources
  • The modern tech stack can combine individual customer actions with actions by other similar consumers to develop more relevant messaging and offers
  • Customer loyalty tech can increase a retail marketer’s ability to truly personalize communications, recommendations and more
  • Today’s loyalty technology helps make customer data more actionable in real-time
  • And it can help track and engage customers during non-purchase interactions

Your customers receive hundreds if not thousands of pieces of content every week. To stand out from the noise and clutter, relevant content is essential. But you can’t develop relevant content if you don’t know your customers’ preferences, needs and interests. Here, we share a straightforward, three-step strategy for uncovering this critical information — so you can reap the benefits of greater engagement and deeper, stronger customer relationships.

You’ll hear from:

  • Sastry Penumarthy, co-founder and head of strategic alliances and partnerships at Punchh, which developed a unified platform that integrates with existing systems to help retailers create data-driven, AI-powered customer experiences that build loyalty and sales.
  • Mark Samardich, strategic accounts loyalty at Cheetah Digital, whose customer engagement technology solutions are designed to help marketers manage complex data to create personalized, cross-channel customer experiences at scale and throughout the customer lifecycle.
  • Jeff Young, president of ITSServices, a consulting company focusing on Microsoft Dynamics 365, which features a set of business applications that work together to reveal real-time, AI-driven insights to guide your organization to better, faster outcomes, including enhanced personalization functions.

Loyalty Technology: A Definition

To make sure we’re all starting from the same frame of reference, let’s review what we mean by loyalty technology. Basically, it’s the conglomeration of tech that supports every facet of your loyalty efforts, including software for your member database, customer service, point of sale, email service provider, customer engagement, advocate marketing, loyalty program, e-commerce AI chat functions and more.

Customer loyalty technology can be computer- or web-based. And your organization’s stack may include a single platform that does all of the above. Or, more likely, it has a foundation piece (typically the database) that must integrate with other applications from third parties.

Where Customer Loyalty Technology Has Been

To appreciate where loyalty technology software is today, a little historical perspective helps, says Samardich. In the past, retail marketers were often dealing with points-based, enterprise data collection solutions controlled by IT departments that didn’t want to share, which meant marketers had little access to customer data. With the advent of customer data platforms (CDPs), or so-called data marts, IT was able to move select data from the enterprise solution to the CDP, where marketers could work with it.

At this stage, says Samardich, marketers “had a better set of information, but it wasn’t timely. That’s the paradigm marketers have had to deal with.”

On top of that, the information was very fragmented across disparate channels. Samardich estimates there are more than 20 different technology touchpoints that a consumer can have, from television and radio, to direct mail and email, to SMS and social. Collecting data from these sources has added complexity to the game, making it more difficult to access and use the increasingly large amounts of data being gathered.

Yet, boil it down, and marketers want some very simple things from technology. “They want to engage with consumers in an emotional way,” says Samardich. “They want to have a value exchange between their brand and the consumer that’s meaningful and genuine, and they want to be able to personalize that, so it’s really related to me [the customer]. All of those things require one thing — actionable data.”

Next-Level Integration

Fast forward to today, and it’s more important than ever for marketers to pool data from those disparate sources, interactions and experiences. The good news: Marketers now have data warehouses, or data lakes, that allow their point-based enterprise systems to access all of that data in a much more real-time environment, says Samardich.

This helps marketers create well-rounded identities for each customer that include their activities in multiple arenas. Whether they’re browsing your website, interacting with your social channels, checking out as a guest online or purchasing in-store, the technology today should allow you to identify that it’s the same person taking action, says Young.

In essence, this gives you the “golden record” — a single record for each customer that contains all relevant information about that person. And, from those behaviors, you can leverage AI to determine what that person might want to purchase next.

But, adds Young, today’s loyalty technology takes this to a new level. “People talk about personalization, but that’s generic,” he says. “It’s more than that. It’s being able to hone in on what this person would like based on their behavior and other people’s behavior. What are other people searching on the internet that may be relevant? What are people similar to this customer interested in? When you tie it all together, what can you offer that customer? All those pieces together give you the ability to come up with loyalty suggestions quickly.”

Samardich agrees. “You have to get data at rest and data in motion, bring that together and allow it to be actionable. If it’s not actionable, you can’t communicate in that moment, and it loses its value.”

Personalization from a Channel Perspective

Two sources of customer data, in particular, are vitally important to today’s retail marketers — online and physical, or bricks-and-mortar. Virtually since the advent of e-commerce , online retailers have had an edge, since they’ve been able to track individual customer behavior with relative ease, says Penumarthy. They know what a customer looked at on their site and what she purchased, making a certain level of personalization easier.

But in physical retail, there has been no equivalent to that, Penumarthy points out. “[A retailer] may know in a particular store the number of handbags sold by the minute or the hour. But may not know that I purchased a Michael Kors bag. They don’t associate me as an individual with that purchase,” he notes.

Today’s loyalty technology software is changing that by marrying an individual customer’s digital identity to bricks-and-mortar store behavior. Being able to map interactions through both digital and physical channels lets you create the most relevant personalized offers, says Penumarthy. It’s a core element of a loyalty relationship and something consumers today simply take for granted.

“They expect an omnichannel experience that could begin at the physical store and end in online, or vice versa, or a number of other paths. They want that personalization regardless of their personal journey,” he adds.

But channel-based integration and personalization doesn’t stop there. Modern loyalty technology should be able to gather data from all different mechanisms — for instance, social media, web search and chat, not just purchases. All of a customer’s activities over all of these channels loop together to show the complete customer experience with your brand, says Young. And from that, again, you can provide recognition and rewards personalized to that entire experience, not just one slice of it.

With the use of AI and real-time processing, you can provide that recognition and rewards at scale and regardless of channel, as well.

Enhancements to Real-Time and Location-Based Capabilities

Which brings us to our next loyalty technology innovation — the ability to do more in real time, thanks largely to the incorporation of AI and machine learning. For instance, Cheetah tech features integrations that allow member profiles to be updated on the fly with purchase and reward-redemption activity. The system can then give the customer an appropriate in-the-moment response, such as a product recommendation, a best customer status recognition or a reward update.

Added to that, loyalty technology is also increasing retailers’ location-based personalization capabilities. For instance, smartphone location functions, store apps and digital wallets can allow floor staff to identify when an individual customer is in the store, says Samardich — provided the consumer turns on location services, in-app messaging and other relevant features.

These location-specific technologies could allow floor staff to not only identify when someone is in the store, but potentially even where they are on the sales floor. Combine that with an AI-powered recommendation engine and the customer’s comprehensive profile — with past behavior, loyalty program status and more — and you can really take personalization to new heights.

Imagine, says Young, a sales rep being able to greet a customer by name, make a personal recommendation — even pull an item off the shelf and have it waiting for the customer to try. Or, adds Samardich, picture your store app generating a personalized, in-the-moment message — even a “surprise and delight” gift for a loyalty member.

In short, imagine creating the most personalized customer experience tailored expressly for that particular customer at that point in time.

Tracking Non-Purchase Engagement

Another twist to modern customer loyalty is the increased importance and value of being able to engage with, track and reward customers based on non-purchase transactions. As TechnologyAdvice notes, “The majority of interactions consumers have with an organization will not result in a purchase. That means the best customer loyalty programs now have to extend past sales.”

That could mean a customer reading value-added content on your site, like a blog or look book, or participating in a quiz or survey. Actions like these are relationship-building, and when you recognize or reward them, you make the relationship even stronger.

That means your loyalty tech stack needs to be able to track and respond to consumer actions that aren’t sales related. For instance, says Samardich, “Using propensity scores built into the data, you can now extend personalization beyond the fact that I just purchased something or used a coupon. If I haven’t visited in the last 30 days, I might receive something to prevent me from churning. If I haven’t visited your website or store in the last 60 days, you might want to provide a different sort of offer. It’s truly the ability to work within the entire lifecycle of a customer.”

Customer Loyalty Technology Is a Journey

If you’re already stressing about all the new tech you’ll need to add to your system to keep up, much less gain an edge, relax. For one thing, loyalty technology tends to be relatively more affordable and accessible today. Plus, you don’t necessarily need to start from scratch and rebuild your entire stack. Young notes that an individual organization’s needs depend on where they are now and where you want to go.

Penumarthy adds, “These are what a modern system is capable of doing. That’s not saying you need it all. You can start with a couple [of additions] and evolve with them over time. It’s a journey.”

Put your focus on ways to integrate customer data and make it actionable. This can allow you to deliver customer experiences that are more personalized than ever, and, as Samardich says, “create a moment with the customer that hadn’t existed before.” And that will let you continue building loyalty that will turn into sales.

Do you need to update your loyalty technology, but you’re not sure exactly what you need, where to start or if your in-house team has the knowledge needed to make it happen? CCG’s retail marketing experts can help with technology sourcing and implementation support. We can assist with a solution search and can even provide experts to work side-by-side with your team on implementation. Schedule a free consultation or call 303.986.3000

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Sandra Gudat

Author Sandra Gudat

Sandra Gudat is CCG’s president & CEO. Considered a pioneer in the field of customer marketing, she has a diverse background in consulting, database marketing, advertising, retail and business management. She is a frequent speaker on customer loyalty marketing and developing customer-centric policies

More posts by Sandra Gudat

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