Drive Sales by Mapping the Retail Customer Loyalty Journey

January 13, 2020 January 23rd, 2020 CCG Retail Marketing Blog

Discover the benefits of having a loyalty program customer journey map. Plus: Insights into the challenges you’ll need to overcome and the unique elements it requires.

By Lane Ware, former CCG SVP, consulting and account services

2 Women Window Shopping

Article Highlights

  • Few retailers today have a customer loyalty journey map.
  • Yet, customer loyalty journey mapping can drive incremental revenue, shorten sales cycles and increase repeat visits.
  • There are three key challenges for mapping the customer loyalty journey.
  • There are four distinct elements that make loyalty program customer journey mapping unique from traditional customer journey mapping.

Most savvy retail marketers know that customer journey mapping is an important tool that can have a significant impact on the bottom line. In fact, an Aberdeen survey1 found that companies with a formal program to map and manage customer journeys enjoy superior sales, marketing and service effectiveness. Specifically, they increase return on marketing investments — incremental revenue associated with marketing campaigns — by 24.9% year-over-year. This is in addition to reducing service costs by 21.2% and shrinking the average sales cycle by 16.8%.

But few of today’s retailers have a loyalty program customer journey map, which can help drive incremental revenue lift and repeat visits from loyalty program members. That’s despite the fact that loyalty members are typically responsible for 43%2 of a company’s overall revenue — or more for most retailers, based on CCG’s experience. Not to mention that loyalty member average order sizes are higher — and their lifetime value two to five times greater — than that of non-members.

Retailers may understand that leveraging customer loyalty program data can help them better understand how, when and why shoppers engage with their brand. But most fail to adjust their loyalty program touchpoints and messages to optimize the data collection and refine the messaging. It requires the right messages at the right time to influence the behavior and drive incremental sales. That’s where customer loyalty journey mapping comes into play.

Why map customer loyalty journeys?

CCG’s work on dozens of retail loyalty programs has shown that optimizing customer loyalty journeys is critical to getting the most out of your loyalty program. Combined with targeted benefits and the right infrastructure, optimized customer loyalty journeys can drive a 4% to 15% lift in year-over-year revenue from participants.

By mapping the customer loyalty journey, you can better understand where there are gaps and what messaging will best target the customer’s wants and desires at that point. That can lead to shorter sales cycles, a greater number of repeat purchases and less churn.

Low Awareness Depletes the Power of a Loyalty Program

CCG’s research into hundreds of retail loyalty programs, along with optimization and management of dozens of others, clearly shows that one of the top reasons loyalty programs underperform is because of a poor understanding of the program by members.

For example, one women’s apparel retailer the agency worked with had a best-in-class overall awareness of their loyalty program. But when looked at by different segments, it was clear that the base member understanding of the program rated just above average. And only one benefit from their feature-rich program was identified by most shoppers. A concurrent communications audit identified significant gaps in the customer loyalty journey, particularly when communicating point balances to existing members.

CCG’s recommendations not only drove the program to top of mind, but also better leveraged the retailer’s loyalty benefits to drive sales as part of an overall program optimization.

Passive versus Active Participation

Another CCG client, a $1 billion fiscal year footwear retailer, had low awareness of their loyalty program. Only 47% of their shoppers were able to recognize the retailer’s loyalty program, and even fewer understood that they earned points for every purchase as part of the program. Just 40% of the members bothered to track their point balances.

It was obvious that members were passively engaged with the program, meaning they weren’t changing their shopping behavior based on the program’s benefits. The retailer’s flat year-over-year sales and high percentage of one-time shoppers further supported the findings. By creating a loyalty program customer journey map, we were able to find several low-hanging opportunities, including insights into driving repeat purchases.

Why aren’t more retailers mapping customer loyalty journeys?

If we know that mapping and optimizing the customer loyalty journey can result in a year-over-year sales lift from members, why do so few retailers today take the time to map the end-to-end loyalty journey?

Data Silos

Most customer journey mapping is conducted by the digital team. Online browsing and purchasing behavior are mapped at a granular level as a foundation for abandoned cart emails and other proactive transactional communications. But because the loyalty data is typically stored in a separate database, the sign-in, point balance and other elements that are part of the loyalty members’ decision-making processes aren’t easily available or integrated into the mapping.

Channel Specific

Another common reason that the customer loyalty journey isn’t mapped is because loyalty is cross-channel. Following a solely digital path is easier than tracking a journey that crosses between brick-and-mortar and online browsing. Attribution of brick-and-mortar sales is still a struggle for most retailers, never mind understanding the triggers that prompt a loyalty enrollment.

Lean Resources

Despite the projected growth in the retail loyalty industry, most loyalty and CRM departments run lean and mean. Even as retailers’ investment in loyalty programs and CRM is growing year-over-year,2 the growth is concentrated on technology rather than on the skilled human resources required for customer loyalty journey mapping. In a recent Yieldify survey of U.S. and British retailers, “not enough time and money” was one of the top reasons cited for being unable to optimize customer journeys.3

Why Mapping the Customer Loyalty Journey Is Unique

Another reason that retailers are slow in adopting loyalty program customer journey maps is because it’s different than mapping general customer experience journeys. While the process and elements are similar, the context of the mapping elements are unique to loyalty. Specifically, the key differences fall into four buckets:

  1. Personas
  2. Behavioral triggers
  3. Touchpoints
  4. Lifecycle

Different Personas Have Unique Triggers

Understanding what factors are important to customers with different shopping styles provides crucial insights into how to develop customer personas for mapping loyalty program journeys.

The 2019 Retail Customer Loyalty Study from customer.com defined three types of shopping personalities and outlined the factors that build customer loyalty and drive engagement for each. Here’s a quick overview:

  • Loyalists. The standout loyalty statistic for this group is their high ranking in the “passion dynamic,” featuring a high ranking in intangible factors, such as fair treatment, trust, caring staff and status.
  • Roamers. The factors most important to Roamers comprise the “practicality dynamic,” including a sharp interest in receiving incentives to shop.
  • Neutrals. It’s easy to think of the Neutral shoppers as deal seekers who are price-driven. But this group tends to place less importance on promotions and more on an effortless shopping experience that balances convenience with value.

Unique Behavioral Triggers

Loyalty programs also have a unique set of behavioral triggers that can be leveraged for different personas. Some examples include:

  • Welcome (enrollment)
  • Profile completion request
  • Points earned notification
  • Bonus point opportunities
  • Points expiration notification
  • Near a reward notification
  • Reward expiration alert
  • Tier status upgrade/change announcement

Finally, a trigger that needs to be on every marketer’s list is simply recognition. As seen above, Loyalists desire to be recognized for their status as good customers and even a simple “thanks” can increase their satisfaction. In fact, CCG’s experience sending thank-you notes to the top customers of several retail clients has shown a resulting lift in sales as high as 14%.

Customer Loyalty Journeys Have Unique Touchpoints

Fifteen years ago, the average consumer typically used two touchpoints when buying an item and only 7% regularly used more than four. Today, consumers use an average of almost five touchpoints with nearly 50% regularly using more than three, according to Webloyalty and Comlumino research.4

In addition, loyalty members interact with more touchpoints compared to non-members. This may include loyalty-specific websites or microsites, mobile app features, loyalty program enrollment forms/cards, website log-ins, store signage and loyalty program partner collateral. All of these touchpoints need to be mapped. Some of them may be communications specific to the loyalty program, while others may be messaging included in regular marketing and advertising campaigns.

For example, is loyalty incorporated into your website and mobile app? Can members see what points they will earn for each purchase and know when they have triggered a reward? Can they access available rewards and promos in their profiles? How about in their carts? If a top tier member writes a product review is their status noted? Do they receive an immediate response?

You also need to review the touchpoints at the stores. Is the signage fresh? Does it accurately reflect your program value proposition? Is it visible? Are customers prompted for loyalty IDs during every transaction? What happens if they’re not asked and inquire after the sale is final? How can a customer find out if a reward is available before they’re at the register?

Lifecycle and the Loyalty Loop in Customer Journeys

One of the greatest challenges in mapping customer loyalty journeys is that they aren’t linear paths with a clear beginning and end. In today’s retail environment, where consumers’ paths often involve multiple channels and third-party sources — which can occur post-sale — the customer loyalty journey is really a loop. It’s become a cycle of recommendations and online discovery as more people post reviews, more people read them and in turn they give their own feedback, which is then picked up by a new group of customers.

For example, more than 10 years ago, McKinsey & Company noted that more than 60% of consumers of facial skin care products go online to conduct further research after the purchase — a touchpoint unimaginable just a few years previously.5 Yet today, the percentage is likely even higher.

Your loyalty program customer journey maps should be based on these loops since, by its very nature, the program provides a platform for focusing on the post-purchase experience. Your program not only helps identify your most loyal customers by collecting buying behavior and preference/profile data, but it can also offer incentives for reviews and referrals. Not to mention that it provides an ongoing communications stream and multiple triggers for messaging.

We’ve traditionally mapped customer loyalty journeys using standard lifecycles in a fairly linear fashion such as those noted below.

We are now adopting an approach similar to McKinsey’s that places more emphasis on the post-purchase experience.

Start with Small Steps

Feeling a little overwhelmed? Comprehensive mapping of the complete loyalty program customer journey is a significant endeavor. However, focusing on a single persona and journey is a great way to start. With this relatively small step, you can demonstrate how the effort will benefit your company and help justify the time required to build out additional journeys.

Still wondering how to begin mapping and optimizing your loyalty program customer journeys to ensure the greatest impact? Or wondering if there’s an opportunity to improve your post-purchase loyalty customer experience? CCG’s retail marketing consultants are here for you.

Schedule a free consultation or call 303.986.3000.

We’ve specialized in customer loyalty for more than 40 years, including designing and revitalizing loyalty programs of all types. We offer a full range of retail marketing solutions, from strategy to data analytics, technology sourcing to creative services and more.

1 “Customer Journey Mapping: Lead the Way to Advocacy,” Omer Minkara, Aberdeen Group, posted November 2016, https://www.mcorpcx.com/customer-journey-mapping-lead-the-way-to-advocacy-lp, accessed Dec. 27, 2019

2 “Loyalty Big Picture Report,” Caroline Papadatos, loyalty.com, posted May 3, 2019, https://www.loyalty.com/loyalty-big-picture/thank-you/executive-summation/, accessed Dec. 27, 2019

3 “The State of Customer Journey Optimization,” Jay Radia, yieldify.com, posted Oct. 16, 2019, https://www.yieldify.com/ebooks/state-of-customer-journey-optimization-2019/, accessed Dec. 27, 2019

4 “The Connected Consumer,” Webloyalty and Comlumino, posted March 2019. https://webloyaltycorporatecontent.s3.amazonaws.com/webloyalty__the_connected_consumer_report_2015_1427886678.pdf, accessed Dec. 27, 2019

5 “The Consumer Decision Journey,” David Court, Dave Elzinga, Susan Mulder and Ole Jørgen Vetvik, McKinsey Quarterly, posted June 2009, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey, accessed Dec. 27, 2019

Leave a Reply