Between the pandemic and Google announcing it’s planning to phase out third-party cookies, Consumer Goods companies are facing some tough challenges. It could be time to consider a loyalty strategy and turn those challenges into exciting and profitable opportunities.
Here are four key CPG trends and a few ways customer loyalty for CPG can help enterprises not only overcome them but accelerate growth.
Trend #1: 80% of CPG companies say resetting their go-to-market strategy is critical to meeting objectives (Source: Deloitte)
Today’s consumers have more choices than ever. The explosion of private-label brands and online marketplaces have led to fierce competition and slowed growth for CPG enterprises that are still using the traditional CPG model, where the majority of sales go through retailers.
Typically CPGs have relied heavily on third-party data for their digital advertising. But as a result of changes in data privacy laws, the death of third-party cookies, and the reality that retailers are keeping their data close to the vest, CPGs are moving toward omnichannel direct-to-consumer models and starting to double-down on owning their consumer relationships.
Customer loyalty for CPG enables organizations to collect first-party data at scale to fuel value-based digital advertising campaigns that increase customer engagement and drive better results.
Trend #2: More than 50% of CPG companies see an increased reliance on online and omnichannel as a means of reaching and engaging consumers (Source: Deloitte)
According to Zodiac, only 20 percent of new customers will make a second purchase. That’s why it’s so important for companies to identify meaningful ways to increase customer engagement between transactions and across the customer journey.
Customer loyalty for CPG provides valuable insights that help you individualize engagement interactions. Giving customers relevant, value-based reasons to engage with your brand is absolutely worth it. Forbes reports that repeat customers can increase sales by 47 percent, and loyalty members spend up to 18 percent more. And loyal members are your best brand advocates.
Not sure how to increase customer engagement? Here are just a few examples of behaviors you can reward:
Loyalty program benefits enable CPG brands to extend their strategy beyond discounts and incent desired behaviors while building emotional bonds that last. This leads to increased customer lifetime value and drives growth. And rewarding advocacy and referrals helps you gain new customers while reducing your cost of acquisition.
Trend #3: 62% of CPGs say they’re working in silos or have a long way to go toward a shared data model (Source: Retail Info Systems)
According to Deloitte Digital, the average business has 17 unique technology applications housing customer data. Let that sink in for a moment. Given that statistic, what’s the likelihood of meeting today’s consumers’ expectation for a unique, relevant, seamless experience no matter how or where they engage with a brand. Slim to none. Like most organizations, CPGs are building their advertising and marketing strategies on partial, stale, and often inaccurate third-party customer data.
Annex Cloud’s purpose-built Loyalty Experience Platform™ gives you a 360-degree unified customer profile based on first-party data, and because of our 100-plus pre-defined integrations it pushes this data across your technology stack in real-time, enabling you to individualize interactions across every touchpoint.
Trend #4: Only about 10 – 15% of customers buy directly through ecommerce, most buy through channels
The foundation for being able to deliver the experience today’s consumers expect is truly knowing your consumers. And that all starts with accurate data that comes straight from the source. No personas but, rather, really knowing who your customers are, what they’re purchasing, why they’re purchasing it, and how often. Retailers aren’t sharing data, putting pressure on CPG brands to start collecting first-party data at scale to better understand their customers.
Loyalty creates a mutual value exchange that incents consumers to willingly share their data in exchange for brands using that data to personalize their experience. This data also enables brands to increase customer engagement throughout the entire customer journey.
Annex Cloud’s Loyalty Experience Platform includes a native receipt scanner which enables CPG brands to not only know what consumers are buying from their brand but what other brands and products they’re purchasing as well, opening up upsell and cross-sell opportunities. Customer loyalty for CPG collects first-party data at scale, which is the first step to owning the customer relationship.
Knowing your customer, so you can deliver unique experiences is just one of many loyalty program benefits, and it pays off. According to Adweek, personalization can:
Before coming to Annex Cloud, one of our CPG clients was getting 600,000 visitors annually to their ecommerce site. Their loyalty program now boasts 25 million members and is on track to reach 10 million. That’s the power of loyalty and a data-led, value-based engagement strategy. Annex Cloud’s loyalty solution includes the widest range of options to increase customer engagement and it’s modular, so you buy only what you need. Ready to talk about loyalty for CPG? Request a call from one of our experts.