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CPG Loyalty: Key Challenges and Solutions

by | Nov 4, 2016 | Customer Engagement, Customer Loyalty, Omni-Channel | 0 comments

The consumer packaged goods (CPG) industry is huge. In the United Sates alone this year’s CPG sales have already amounted to about 769.7 billion U.S. dollars.  To build any loyalty program or CRM setup, it’s necessary to capture and store consumer purchase data, designing a value proposition and maintain a dialogue with your customers. No doubt, it poses a challenge to all industries, but nature of the CPG distribution and retail environments make the impact of those challenges much deeper. That’s why it’s necessary to discuss CPG loyalty at an in-depth level.

CPG Loyalty: The Challenge of Data Gathering

Except for a few rare brands that sell a small portion of their products to consumers directly, CPG brands depend on partners for distribution. Thus, relying on POS systems to identify and collect SKU level detail for each consumer is almost impossible. Very rarely card-issuing banks and retailers will hand over that data to CPG brands.  All these factors make UGC companies data deprived and it’s almost impossible to run a loyalty program without proper customer data.

CPG Loyalty: The Data Solution

Despite the aforementioned challenges, there are multiple ways to get customers to opt into your CPG loyalty program and supply you with the data you need. Most of these methods rely on the shopper self-reporting any purchases or interactions. You can have your loyalty provider build an app to scan packaging codes or receipts. This is the updated version of programs like mail-in box tops.

An example of a CPG loyalty app that lets users scan barcodes to register their products.

An example of a CPG loyalty app that lets users scan barcodes to register their products.

You can begin with purchase registrations where customers can upload their receipts online which can be processed later. You can check if the receipt is valid or not and can assign loyalty points. Another way is to make use of a smartphone- the ubiquitous little device where the future of the online transactions will rely upon. You can ask your customers to enter their email address and receipt number after scanning the barcode.  Similarly, you can create a string of SMS or emails where your loyal customers can put their email address and the product code. This will give you a clear cut idea of who is buying more and to whom you need to offer loyalty points. That’s what acts as the prerequisite of any loyalty program. It’s often smart to combine these types of purchase data–however it comes in–with engagement data. The most straightforward way to execute this is through a microsite where customers can create loyalty accounts and ensure that they’re linked with whichever method of purchase-tracking you’re using.

CPG Loyalty: Your Value Proposition and Rewards

While the data piece of the puzzle can be challenging, it’s usually not difficult to convince CPG customers why they’d benefit from joining your program. Whether you sell shampoo, beverages, candy, or anything else, shoppers are buying your products on an extremely frequent basis. Your products are also likely within a price range where it’s feasible to give meaningful discounts or freebies. Additionally, you can offer third-party rewards. Many companies give loyalty members gifts like gift cards to popular retailers, magazine subscriptions, food/drink coupons, and so on. Depending on your audience, you may find that these rewards will be in extremely high-demand. Don’t forget about experiential rewards, too! These can be anything which will make a customer feel valued. You can give them early and special access to your new range of products. You can think about giving them exclusive access to concerts, games, movies, or other fun events. These are just templates of ideas. We can sit with you and devise such experiential rewards based on what will suit your product line and audience.

CPG Loyalty: Engagement

Customer engagement is the fuel which keeps the loyalty program running. That run stops as soon as fuel perishes, and it’s especially crucial for industries in which the purchase cycle is longer. But don’t mistake attention for involvement! The truth is, your customers don’t just want to buy and receive a coupon at the checkout. They want to be heard before and after. They may wish to suggest new products to companies where they are already loyal. Or those who are loyal to your brand may want to share their best of the best experiences that they have had with your products with other people. They are ready to become advocates of your brand. Therefore, it becomes very important to give them that space…that chance to express themselves. And believe me..people really like to see such experiences. That’s why you should consider creating a hub for customers to talk about new products, ask for feedback from others, share tips, and more. Whatever the form of the discussion, you should reward those who take part in it. Give points to your CPG loyalty members for taking actions like…

  • Purchasing a product
  • Creating an account
  • Connecting on social
  • Signing up for the loyalty program
  • Bonus points for signing up for a subscription
  • Sharing purchases
  • Sharing photos
  • Writing reviews
  • Asking and answering product questions
  • Checking in on the website

For more loyalty program best practices and insights, don’t miss out on our white paper, “Advocate Loyalty: A Four-Point Strategy!” Our guide to the most valuable types of loyal customers will show you where to aim your efforts, and this post illustrates the far-reaching impact of a well-designed loyalty program.

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