Customer loyalty programs are no longer just colorful punch cards that fill your wallet.  Today, customer loyalty is driven by data analytics.  With every transaction, organizations generate  massive amounts of customer data.  

But what good is a pile of data locked inside a database? That data if harnessed well can drive customer retention initiatives, leading to a better understanding of the customer and encouraging a long and ultimately lucrative relationship.

Traditionally, customer loyalty programs put the emphasis on how many times a customer visited a store.  Today, customer loyalty can focus on spending or include philanthropy, games and partnerships with other organizations. Starbucks is a great example. Kelli Haemmelmann of Chief Marketer writes “Forgoing traditional transactional loyalty metrics, Starbucks engages shoppers with music downloads, games, a ‘stars’ system and the occasional free coffee.”  Starbucks Stars are awarded based on spending.  The program entices customers with exclusive deals and advance notice of new products or when seasonal items are returning to the menu.

To drive a sophisticated customer loyalty program, you need to rely on a marketing stack that includes tools for collecting, organizing, and analyzing the data as well as tools to mine the data for patterns and predict future behavior. The Customer Databases sub-category is a good place to start for storing and organizing.  Business Intelligence (BI) Platforms  offer the ability to create applications that analyze data, and highlight the findings in reports.  Data Mining tools enable users to more closely analyze the data with intelligent queries to extract “if/then” real-world associations between data sets.  Customer Analytics tools focus on analyzing and predicting customer behaviors.

Another set of tools takes the next step in putting the data to work. Customer Journey Mapping enable marketers to visualize the process of customers along every touch point with the company.  Customer Profiles identify customers in particular stages of the buying journey, enabling marketers to automate communications while tailoring the message to closely fit a customer’s interests and needs. Cross-Channel Identity Resolution highlights information about customers and their buying habits. These tools also match identities from a number of platforms to create a more complete picture of the customer.  360° Customer View similarly includes tools to synthesize the various data sources down to a single customer. And, of course, don’t forget the Loyalty Management tools to plug it all into.

By building a full and complete picture of the customer, loyalty management tools can personalize the experience.  It’s time to throw out the old blanket reward system — buy 10 coffees and get the next one free.  Loyalty management programs built on strong data analytics can drive repeat business and automate the process of rewarding customers for sharing information, repeat sales, engaging with brand social media outlets or referring other customers.

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