Bad or Insufficient Data Is Undermining Your Customer Loyalty Program

By Kélyn Donough

As marketers, it is our job to make sure consumers know about our products, as well as helping them find solutions that will fit in with their lifestyle. It is simple to say but to do so can be very challenging. Consumers now have the opportunity to interact with an organisation across multiple channels. This is how consumers will compare prices of the products you offer and your service to your competitors.  Organisations ideally need to reward those consumers who are loyal and should incorporate a loyalty programme of some sort.

Benefits of a Loyalty Programme

Loyalty programmes are nothing new to businesses and although they have been around for quite some time, they still gain in popularity each year, which tells you one thing – they work! By having loyalty programmes you get to encourage consumers to continue to make purchases from your business with the result being that they get rewarded.

There is a wide variety of loyalty programme types but the most popular one is where businesses provide points based on purchases made by the consumer – think eBucks from one of the major banks. When the consumer has collected a certain amount of points they then receive free coupons or a free product. Rarely is actual cash given back to the consumer although a major retailer has recently come pretty close to doing this with their Brand Match loyalty programme

Challenges of a Loyalty Programme

Loyalty provides benefits to both the consumer and the business. Loyalty programmes will not, however, be effective if there’s poor contact data and lower-than-planned volumes of individuals signing up for the programme. Another potential problem could be that businesses do not have enough data and consumers do not engage with the business messages.

Loyalty programmes are important to marketers as this is what provides them with insights about consumers. These insights then allow marketers to divide consumers into segments and the resulting segmentation will allow them to target these consumers effectively as they will have the necessary data.