Loyalty Programs – The Heart of Digital Transformation

by Grace Miller |

Loyalty Programs – The Heart of Digital Transformation

Loyalty Programs in the Age of Digital Transformation

We all know that digital transformation is necessary to succeed. According to International Data Corporation (IDC) the direct digital transformation investment is expected to reach $7 trillion with a CAGR of 18% from 2020 to 2023. The global digital transformation market is expected to grow to $1,009.8 billion by 2025 from $469.8 billion in 2020, at a CAGR of 16.5% during this period.

While in 2019 only 44% of the companies were prepared for a potential digital disruption according to Forbes, the stats have pumped up drastically post-pandemic. A Gartner study reports that 70% of customer engagements today are driven by intelligent systems. Today, digital intervention transcends from customer engagement to customer retention and even acquisition strategies.

 

Keeping Up in the Era of Digital Dominance

At the core of any digital transformation is data. To keep up in the era of digital dominance, you first need to analyze what exactly digital transformation means for your business. What data are you collecting and why? Then where does that data need to go? How does the data flow through your systems to deliver the desired customer experience?

We all know that third party cookies are going away and that the number of privacy laws are growing and becoming more stringent. These changes have made it necessary for businesses to opt for strategies that will enable them to collect and use data. Among those, referral and loyalty programs software have emerged as a popular medium and strategy of businesses globally to collect first-party data while adhering to global legal and ethical data protection standards and simultaneously increasing customer engagement rate and overall brand loyalty.

 

Why Loyalty Programs are a Key Ingredient Essential for Digital Transformation

Referral programs and customer loyalty strategies make collecting first-party data from customers extremely easy and with a built in consent mechanism. Not only this, but loyalty programs also provide a valuable two way value exchange. Customers provide their data in exchange for more relevant and beneficial experiences.

With the value of benefits a loyalty and referral program has to offer, be it increase in customer retention and acquisition rate, enhanced customer experiences, long-term customer engagement and improved customer lifetime value and overall customer satisfaction rate; collecting first-party data is among the most crucial advantages that can truly transform your brand. The data you collect through your loyalty program software can help you design marketing and business strategies that are better-suited to your customer’s preferences and sensibilities. First-party data can help you understand your customers as well as anticipate their needs. It is a key ingredient necessary to develop intuitive technologies that will digitally transform your brand and make it an integral part of your customer’s life.

 

Loyalty Marketing’s role in Creating Brand Loyalty

There is a good reason why some of the biggest brands across the world, along with medium sized businesses have strong loyalty platform providers at their side. For decades loyalty programs have empowered brands and businesses by increasing customer engagement and more importantly by building brand loyalty. Loyalty towards a brand is only possible when a customer trusts the brand irrevocably. Trust comes from long-term engagement and a strong customer-brand relationship. The basis of this is a mutual value exchange and on-going dialog between the brand and its customers. Loyalty program facilitates this and gives customers an extra incentive to remain engaged with the brand and repurchase frequently.

With the data you collect through loyalty and referral programs, you can use that knowledge to provide personalized experiences and rewards. Systematically and methodically rewarding your customers, through your loyalty program, whenever they answer the CTAs reinforces behavior. It encourages them to repeat the pattern in order to earn more rewards from the brand. This mutual value exchange creates an emotional connection with the customer toward the brand. The positive association generated through the loyalty program fosters trust and loyalty. Thereby impacting overall brand value and creating a strong brand following in the process.

 

Understanding the Concept of Progressive Profiling and How Loyalty Strategies Create Mutual Value Exchange

Collecting data from customers is not a one and done process and is certainly not limited to a once or twice event, which actually works in the favor of the brand/ business. With progressive profiling you can gradually build an extensive profile of your customers by collecting data from them periodically. With progressive profiling you can be assured of the quality of data as it is up to date, relevant and comprehensive.

Successful progressive profiling is only possible when you create a lucrative give and take. Loyalty strategies enable a give and take between the brand and its loyalty members at various touch points over the customer’s journey with the brand. Every exchange increases the value of customer-brand relationship to both parties – the brand as well as the member. The brand gets repeat purchasers, consistent transactions, on-going engagement with customers and most importantly zero and first party data. While the customers, in exchange, receive individualized experiences, privileges of special status, exclusive benefits and rewards.

 

Collecting Data through Customer Loyalty Strategies

Let’s delve deeper into how customer loyalty strategies empower organizations to collect zero party and first party data, strategically and methodically while creating a mutual value exchange and creating a richer golden record of the customer.

 

1. Enabling Brands to Collect Deep Member Data

At the sign-up stage, the customers share their data while creating a member profile. This stage empowers brands to collect data like name, location of purchase, customer address and opt-in date. The deep member data will give insights on available points, redeemed points, lifetime points, tier status, last activity, and expiration date of points, customer’s preferred way to earn and redeem points

2. Enabling Brands to Collect Data from Interactions

Loyalty strategies further enrich the golden profile of customers by providing information on customer purchase history, preferred engagement channels, history of cross-brand purchases, purchase location, campaign participation rate, number of events the customer has participated in that were organized by the brand, how many and which friends the customer has referred the brand to, number of social media postings the customer has made for the brand, reviews, rating community comments and images the customer has uploaded for and about the brand.

3. Enabling Brands to Collect Data on Customer Attributes

Loyalty strategies will give you great insights on customer attributes. From product preferences, most purchased styles, lifestyle and travel preferences, to family member and friends names as well as vehicle descriptors, loyalty strategies will give you an overview of your customer’s lifestyle and product preferences. This kind of data will empower your brand and help you build better business strategies that are specifically designed to appeal to your customers.

How Can You Digitally Transform Your Brand through Loyalty Marketing

Loyalty membership enables businesses to know more about their customers, create a better connect and eventually sell more to them. To maximize the scope and unleash the true potential of loyalty marketing, you need the assistance of an experienced loyalty partner.

A seasoned loyalty partner like Annex Cloud will not only help you to effectively collect zero and first-party data but also empower your brand by designing loyalty strategies that are best suited for your business. Your loyalty program needs to embody your brand ethos and help you achieve your business and marketing objectives. The experienced and expert team at Annex Cloud understands this and utilities the latest technology to design premium loyalty and referral programs for your business. Annex Cloud’s result-oriented approach ensures increased average cart, higher traffic from multiplier points and boost in the number of gold and platinum members. Annex will also ensure year on year increase in member growth rate, annual member participation rate and amplified loyalty redemption rate.

To learn how you can upscale your business through loyalty strategies, connect with our Loyalty Experience Manager.

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