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How to Make Loyalty Program Data Pay Off


Loyalty Program Customer Data Improves Sales

Business owners often assume that the sole purpose of loyalty programs is to build customer loyalty, as their name suggests. But one major, oft-overlooked benefit of running loyalty programs is that they give you to a wealth of customer data. By using that data intelligently, companies can get a much clearer picture of their customers and better target their promotional efforts.

Loyalty programs provide you with a variety of details about your customers, such as what they buy, when they buy it, why they buy it, and what else they want to buy. This information helps you serve your customers better, effectively persuade them to spend more, and reward them for behaving the way you want them to. Thanks to technology, companies with loyalty programs have access to a mountain of valuable data. The challenge, however, lies in making the correct interpretations based on that data.

Identify Your Most Profitable and Least Profitable Customers

Loyalty programs allow companies to track sales at an individual level, so they can identify the most profitable and least profitable customers and get a 360 degree view of each customer based on their buying habits, attitudes, and demographic attributes. This data enables companies to identify offerings that are the most likely to make customers truly loyal. By effectively analyzing loyalty program data and consistently offering goods and services that meet each customer’s unique needs, companies can build long-lasting relationships with their customer base.

Acquire New Customers

Companies can also use existing data from their loyalty programs to acquire new customers. For example, companies can establish demographic profiles of their most profitable customers and then target consumers with similar demographic profiles during customer acquisition campaigns.

Identify Trends and Patterns

The purchases of loyalty program members are all stored in a database, which records everything customers buy and have previously bought. Over time, the data accrues, enabling companies to use analytics to identify trends and patterns. On a micro level, this could mean sending customers coupons for specific products based on their shopping history, while on a macro level, this could mean determining that people who buy gourmet coffee also like to buy biscotti and then placing those two items next to each other on store shelves.

Loyalty programs may seem like they’re merely designed to save customers a few cents and increase their loyalty, but their primary benefit for companies is that they enable them to collect valuable data about their customers’ buying habits. Launching a loyalty program for your company can be costly and a waste of time, however, unless you’re committed to mining customer data for insights and then making changes that are likely to increase customer loyalty.

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