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Your Customer Loyalty Offers Are Broken

December 31, 2020

In this article you will learn:

Consumers are fiercely loyal to their favorite brands. But it's just not the name or logo that matters. What's most important today is a brand’s ability to engage with relevant offers that appeal to consumers on a personal level.

But unfortunately, there's a good chance your offers are broken. And if they are, they're not helping inspire the consumer loyalty that will raise your brand to the next level and help lift it during the current pandemic-related economic challenges.

5 Reasons Why Your Offers Are Broken

#1 Your brand is blasting one-size-fits-all offers to everyone — all day, every day

Many brands tend to stick to traditional customer loyalty offers, such as the "spray and pray method" of broadly distributing a generic discount or coupon, and hoping it yields some results. Others put a focus on quantity over quality, blasting customers with emails multiple times a day.

This approach can make even your most loyal customers feel just like everyone else. Worse, from a revenue standpoint, you risk discounting products that your customers might have bought anyway, for full price.

Frequent contact exacerbates the problem, quickly fatiguing your customers and making them less likely to pay attention to your marketing programs overall. Annoyed customers will unsubscribe from your distribution lists, or “passively unsubscribe” - i.e. they will ignore or automatically delete your emails all together, without you even realizing they have disengaged.

#2 It takes months for offers to get to market

The process of deciding on an offer (should the discount be 10% or 20%? How long should it stay valid? Is there a minimum purchase?) can often be a cross-functional negotiation or nightmare. Marketing wants an offer customers will respond to, Revenue Management wants to minimize the revenue risk, IT wants something easy to operationalize and Legal wants to keep everyone in compliance.

Once agreed upon, operationalizing these offers to work and fulfill correctly, developing the marketing assets, etc. takes additional weeks or months - and all for a single offer. Introduce a few variations tailored for specific macro-segments, and the lead time grows further. And once the strategy is set, making changes can be difficult or impossible. By the time an offer gets to market, the environment that made it a seemingly great strategy could be completely irrelevant.

With the right technology, you can fast-track the end-to-end process: crafting offers using dynamic templates, creating variations for all your microsegments, even down to unique 1:1 offers and bringing aspects of fulfillment off-platform, reducing the reliance on IT — in a matter of days, often 10 times faster than traditional methods.

As you support exponentially more offers and offer variants, you can also experiment, learn and optimize to achieve your offer strategy goals while reducing the organization’s lift in getting it to market.

#3 You aren’t using customer data to inform your strategy

If you have a loyalty program or a website, you have a valuable source of first-party customer data. Unfortunately this important asset is often overlooked, or the process to access and incorporate customer data into the offer development process is too cumbersome. In order to truly be relevant to your customers and present them with the most compelling offers, you need to use this data wisely. Models supported by data science can help you understand customers based on historical and predicted behaviors. But even if the data science isn’t sophisticated or available, even simple business rules around customer data can help create more personalized offers and increase the likelihood customers will engage.

Just recently, United Airlines leveraged their customer loyalty program and data to secure a loan. This customer data is a strong first step in understanding them and enabling you to send them offers that get their attention.

#4 You can’t target well, test broadly or be agile enough

Marketers need to be flexible, agile and efficient, especially during and coming out of the COVID era. In order to experiment faster, it's important to reassess your MarTech stack to ensure it supports testing, measurement and reporting insights. Without these capabilities, you will not have the ability to learn and optimize. The right MarTech will enable you to do this quickly, and at scale, so you can create and test strategies based on any customer attribute(s), and with permutations across multiple dimensions (creative, action, time, spend threshold and reward).

Traditional offer creation and deployment processes are not conducive to measuring and testing quickly, because deployment and measurement timeframes are too long; and in unstable marketing environments, past learning is less predictive of future behavior. With the right tech, you can test and learn in just days and make the right changes to meet your customers where they are.

#5 You’re not delivering the relevance and value consumers demand

Your offers need to be relevant. Today’s consumers have high expectations. They are comparing your brand experience with tech giants like Amazon and Netflix. So if you don’t provide relevance or value, you’re not creating a good customer experience and you won’t earn their loyalty.

Customer loyalty in 2020 and beyond

Many consumers feel that brands are lacking in their efforts to recognize them as individuals, according to our study, "Brand Loyalty 2020: The Need for Hyper-Individualization." In this survey of more than 2,000 consumers, we checked in with consumers on their relationships with brands, including what brands need to do to build and strengthen individual customer relationships and deliver personalized experiences.

The study showed that the importance of individualized experiences to ongoing customer loyalty has risen to new heights over the past five years. Many brands are aware they need to take a more personal approach to marketing, but most have not equipped themselves with the processes or the technology to do so effectively. As a result, they are not reaching their potential for consumer loyalty.

Segmentation is table stakes today

Basic customization tactics – like marketing emails that address the customer by name – don’t provide the relevance and value consumers crave. Consumers want brands to understand their unique desires, and reach out to them with offers, promotions, rewards or other communications designed especially for them. In exchange for these individualized offers, 81% of consumers said they'd be willing to share more personal information with the brand – and that’s a coup for marketers.

Consumers realize you're not taking their loyalty seriously too. About 73% of those we surveyed said brands should do more to earn their loyalty, and the more personalization tactics a brand uses, the more loyal they are to the brand.

Simply put, if you're not ahead of the curve on individualization, it's going to be increasingly hard to differentiate your brand experience and inspire customer loyalty. Only 18% of consumers say they very frequently receive marketing emails that contain unique content that makes them feel as if the brand understands them as individuals. That leaves a lot of room for brands to do better with their customer loyalty strategies.

The Fix is In

Achieving meaningful individualization in offers isn't an easy task, and that's likely why many brands have not yet succeeded. Within the current process and tech platforms of many companies, granularly developed, 1-to-1 offers, can consume a staggering amount of resources across Marketing, Data Science, IT, Revenue Management and more.

But with the right tech platforms, powered by artificial intelligence (AI) or machine learning (ML), brands can more effectively and efficiently personalize offers, resulting in better conversion, higher revenue and deeper loyalty. AI can extract insights – motivations, preferences, likes and dislikes – which then enable marketers to automate the collection of data and the refinement of offer strategies. ML builds on AI, by identifying the optimal context, such as the best promotion to send an individual and the right time to send it.

MarTech platforms that leverage AI and ML are changing the game for personalization marketing, in several key ways:

  • Faster deployment of offers
    By automating formerly manual processes, brands can deploy new offers in a matter of days (instead of weeks or even months) and deliver infinite permutations of offers vs. a limited number of static offers.
  • Increased customer engagement
    with better targeting and relevance
    Analyzing vast amounts of data, brands can understand and dynamically target customers on various attributes, history and predicted behaviors, and personalize offers based on desired incremental actions, time of day, spend threshold, rewards and more.
  • Better insights with easy experimentation
    The faster process gives brands the agility to fine-tune and test offers in a timely fashion, and adjust on-the-fly to deliver better results.

Investments in such advanced digital technology, combined with proprietary data, pays off in the end. Brands that invest in effective individualization achieve greater long-term loyalty. The more a brand engages with consumers on an individual level, the more those customers will engage with the brand. This translates into increased revenue and higher customer lifetime value (LTV). In fact, brands that leverage AI and ML can improve their offer return on investment (ROI) and grow revenue by as much as 3x, and more than double customer engagement.

Relevance creates customer loyalty

Given the impact of the coronavirus pandemic, consumers are changing the way they shop, putting more attention on their safety and value in the light of a faltering economy. At the same time, brands are struggling, having to reduce budgets and staff to weather the storm.

While it may be difficult to look past the current environment, brands should take advantage of new opportunities to engage with customers. Now’s not the time to shutter customer engagement initiatives that drive value. Instead, think about how technology can help produce better insights so you can meet individual customer needs, particularly at a time when that customer may be struggling to deal with the impacts of the pandemic. By better understanding your customers and delivering what they need, when they need it, you'll foster deeper connections and loyalty, while also improving their bottom line.

New offers take a lot of time and resources

But offer campaigns are an important tool in your toolbox. Learn the 5 steps (with a free planning template) to break free from ineffective campaigns and deliver offers that influence customers, build long-term loyalty and ensure you can achieve the business results your company desires.