Anne receives emails from two bookstores she purchased from months ago. Bookstore A sends her emails about general offers and discounts they are running, while Bookstore B sends her recommendations based on her purchases, new launches in genres she might be interested in, personalized communication and special discounts on her preferred books and stationery.
Which emails do you think Anne might be interested in? Which emails or communication would interest You?
It is common knowledge that personalized communication and marketing strategy has a higher efficacy rate. According to GetResponse, personalized emails have an open rate of 29.95% and a click-through rate of 5.03%. Another research by Epsilon found that 80% of customers are more likely to make a purchase when their experience is personalized. This fact is also backed by an Accenture report that states that 91% of consumers say they are more likely to shop with brands that provide offers and recommendations which are relevant to them.
More and more brands are waking up to the idea of personalization in marketing. Companies are learning there is potential in this area to grow their business. From communication to customer experience and now loyalty programs, personalization is being rapidly adopted and implemented to improve ROI, customer satisfaction and overall marketing efficiency rate.
Table of Contents
Personalization – Need of The Hour
The art of tailoring experiences to improve relevancy and response rate is more important now than ever. When 2020 saw a paradigm shift in the shopping behavior of customers worldwide, and when the point-of-sales moved from brick-and-mortar stores to digital stores; personalization became the most talked about and sought-after thing in marketing. In the words of Malcolm Gladwell, Journalist and Author, “In 2020, hyper-personalization of marketing activities is not only possible but is rapidly becoming a requirement in order to stay up with evolving consumer trends.” Creating personalized experiences even in loyalty programs gives the brand a competitive edge. A report by Fundera, states that 56% of the customers stay loyal to a brand that ‘gets them’.
When the world turned to the internet for almost every transaction in 2020, brands began upgrading their technology to deliver a better customer experience. By 2021, customers started expecting brands to understand their requirements and address their needs. A value report by IBM Institute for Business Value states that “76% of consumers expect organizations to understand their individual needs”. Adopting personalization has thus become the need of the hour.
Personalization In Loyalty Offerings
Loyalty programs have undergone many alterations since their inception in the 18th century. With time, the highly efficient marketing strategy has been designed and redesigned to suit the customer preferences, marketing objectives, market trends, and other requirements. Needless to say, generic rewards are losing their spark in the 21st century. A 2020 Forbes article states that 50% of consumers say their primary reason for joining a loyalty program is to earn rewards on everyday purchases while more than 6 of 10 millennials would prefer to donate their loyalty rewards to a good cause as opposed to redeeming them personally. This is a good example of the diverse need and expectations of the consumers.
Today, the customer expects the brand to design a program or at least have provisions that suit his individualistic taste and requirement. Brands like Starbucks have adopted personalization in their loyalty offerings. Starbucks allows its customers to reap rewards based on their frequency of purchase. Along with the help of its loyalty partner, Annex Cloud, even e.l.f Cosmetics rewards customers based on the extended attributes collected through its loyalty offering.
Personalization in loyalty programs highly improves the campaign efficiency rate. The prospect of rewards that are relevant to a customer’s preference is more exciting to the audience than the idea of just generic rewards that they may or most likely may not need. It also greatly helps in improving customer experience by creating a value-added experience. More importantly, it encourages customers further to remain associated with the brand and refer it to their network.
For a detailed white paper on retaining your customers with the help of personalization, click here
What Not to Do
The white paper covers the various advantages and best practices of adopting personalization in loyalty programs. Listed below are things you may need to avoid for ethical purposes.
- Extracting data without customer’s due consent
- Location tracking of users
- Hiding the purpose of data extraction
- Extremely accurate personalization, that customers may find invasive
How Can Annex Cloud Help?
A global enterprise and expert in loyalty, Annex Cloud received the highest scores in 15 criteria in The Forrester Wave™: Loyalty Solutions, Q2 2021. Annex Cloud’s Loyalty Experience Platform can help you extract crucial customer data along with extended attributes and help you design a personalized loyalty experience for your customers. It offers a multitude of personalization options that will not only accurately read the pulse of your audience but also address their pain points and focus on their individualistic preference and reward them accordingly.
To connect with our loyalty expert for bespoke solutions, click here