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What Modern Loyalty
Really Means
What Modern Loyalty Really Means
To acquire and retain customers, brands must deliver unique, individualized experiences.
Why read this paper?
Points-based loyalty programs that reward customers
for dollars spent or frequent visits are no longer a
market differentiator.
Modern loyalty programs aren’t just about rewarding
customers for certain behaviors, but also aim to
present individualized customer experiences.
And they take their cue from the past. After all, before
the dawn of online shopping, people had to shop
at stores where proprietors knew their customers’
preferences and catered to them.
In much the same way, today’s marketers must:
•Know customers’ preferences.
•Pinpoint current and prospective values to
the brand.
•Market in a manner that engages each customer
on an individualized basis.
Modern loyalty programs aren’t
just about rewarding customers
for certain behaviors, but also aim
to present individualized customer
experiences.
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© 2016 Ansira. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
What Modern Loyalty
Really Means
Categories of Loyalty Programs
The way a brand rewards and communicates is
contingent upon many variables, including demographics,
socioeconomic status and purchasing behaviors. In
general, there are three types of reward systems within a
loyalty program:
•Points as Payment: Customers earn points they can
redeem for certain benefits, such as discounts or free
items/services. Airlines, grocery stores and credit card
merchants often use this strategy.
•Surprise and Delight: Customers receive unexpected
offers, discounts or invitations seemingly
serendipitously. With surprise-and-delight rewards,
the customer doesn’t react to a specific prompt with
a specific action to receive a specific reward. He or she
doesn’t know what’s coming (surprise), but the reward
is in line with what he or she would want (delight).
More brands are evolving their loyalty programs to
include surprise and delight.
•Royal Treatment: Giving customers premium
treatment when they’ve done something remarkable
(exceeded their spend threshold, referred customers,
etc.) in relation to your products or services increases
goodwill toward the brand. Premium treatment tells
customers they are valuable in a way that’s different
from others who aren’t enjoying the same perk. Over
time, customers associate these premium experiences
with the brand, which cements their loyalty. Certain
airlines, hotel and casino brands have mastered the
art of royal treatment.
What constitutes an individualized marketing experience
today is vastly different than it was 10 years ago. Whereas
using an individual’s name in the salutation of an email
campaign was once novel and effective, that level of
individualization is now underwhelming. Today, brand
affinity increases through much more individualized
experiences. In addition, individualization must address
the customer’s interaction with the brand and his or her
expected level of involvement in the future — all of which
go beyond a name (no matter how unique the spelling!)
Modern loyalty is about the way a brand engages
customers daily. It has transcended promoting brand
affiliation to focus on influencing behaviors and
outcomes for true business results.
Modern loyalty has transcended
promoting brand affiliation to
focus on influencing behaviors and
outcomes for true business results.
Engage Customers as Individuals
To promote an individualized experience, brands must
deliver one-to-one marketing as often as possible. To this
end, strategy has moved from focusing on the customer
journey to promoting action that creates a unique
relationship between the customer and the brand.
How is this achieved? Ansira takes a customer-centric
approach to understand who customers are, how they
engage with the brand, what they expect and where they
are in their purchase cycles. The customer experience is
a system of dynamic interactions, rather than a linear
journey that begins with enrollment and ends with
advocacy.
Terms to Know
Customer Relationship Management (CRM):
A robust engagement marketing program that
incorporates all available data to provide insight
into a customer.
Customer Lifetime Value (CLTV):
A measurement that represents the customer’s
present and future values.
Expected Customer Lifetime Value:
Forecasted CLTV based on attributes a person
shares with others in a particular CLTV group.
General Store Experience:
Individualized marketing based on a brand’s
knowledge about a customer.
In the past, when brands wanted to influence behavior,
marketers would build customer journeys and lead
customers to specific actions. Now we go beyond the
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© 2016 Ansira. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
What Modern Loyalty
Really Means
customer journey to focus on the entire experience,
reacting to where customers organically go within
the brand experience by paying attention to channel,
frequency, social sentiment and more. Customer-brand
relationships are built with data-driven strategies that
begin with knowing the customer exists and evolving
once the brand gets to know him or her on a more
personal level.
To help brands reach customers as individuals, Ansira
takes an integrated approach of combining loyalty with
customer relationship management (CRM) solutions to
provide and promote rich experiences. Ansira sees CRM
as a robust customer engagement marketing program
that incorporates available customer data (such as name,
phone number and email) as well as third-party data
that can provide insight into a customer. With CRM tools,
Ansira can create brand interactions and scenarios based
on individual preferences, moving the customer down
certain paths to maximize the opportunities to buy more,
buy more frequently or even affiliate with the brand for a
longer period of time.
Within each relationship is a boundless number of
possible paths or touch points, giving each customer the
opportunity to create his or her own experience based
on preferences, channel and message. Because brands
can communicate with customers in a variety of ways
(whether that’s via a mobile app, upon visiting a website
or in response to a tweet), at different times of the day
and with varied tempos, they can foster individualized
customer experiences.
Ansira leverages CRM to foster a brand’s ability to know
what a customer is doing, and this ability has improved
exponentially over the years. The information collected
is more customer-specific and has greater depth and
breadth, allowing brands to leverage that information to
reward customers on individual terms.
Ansira can create brand interactions
and scenarios based on individual
preferences, moving the customer
down certain paths to maximize the
opportunities to buy more, buy more
frequently or even affiliate with the
brand for a longer period of time.
The Intersection of CRM and Loyalty
Loyalty and CRM have been moving toward an
intersection for years.
While marketing used to be siloed across channels —
brand marketing, TV marketing, e-commerce/mobile
marketing, etc. — all facets of a brand can now work in
concert. Ansira helps integrate the disparate marketing
channels via an orchestrated course of action.
Our modern loyalty programs take a “watch and listen”
approach to gain information, and then we release the
right communication at the right time to entice customers
to react. The communication can be anything from
discounts and free items to soft rewards, such as priority
placement in line, room upgrades or private events such
as a hotel happy hour.
Loyalty and CRM have been moving
toward an intersection for years.
Understand Current and Future
Customer Habits
When CRM was first introduced to marketers, the focus
was on leveraging basic personal information (age,
gender, email, phone number, etc.), but over the past
two decades, it has evolved to include transactional
information, such as purchasing patterns, amount of
spend, frequency of purchases, customer sentiment,
etc. That information is aggregated and archived in a
database and leveraged to shape messaging, channel and
specific offers designed to influence behavior. Software
companies provide the tools to systematically implement
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© 2016 Ansira. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
What Modern Loyalty
Really Means
the data, and monitor either manually or automatically,
depending on the situation and client.
Behind the scenes, Ansira analyzes the data to discover
attributes of the customer. Based on scoring and
statistical models, Ansira can understand who the
customer is today and what kind of customer he/she
could be in the future.
For example, vehicle maintenance retailers that offer
oil change services can leverage customer data to
determine what offers will best influence a customer to
take immediate action. Since customers often use price
to choose where they go for an oil change, the company
may offer a discounted rate. The reality of saving money
gets the customer in the door, and subsequent offers
for ancillary services, like brake replacement or an
inspection, drive incremental purchases.
For the longer term, brands can leverage statistical
models to predict which additional services would
benefit their customers (or potential customers in the
household), send offers based on that information, and
then reward purchasing patterns accordingly.
With CRM solutions, Ansira can create opportunities
to influence the customer’s relationship with the
brand throughout his or her life cycle, whether those
opportunities focus on getting that customer on board
with a brand, finding ways to upsell and cross-sell,
identifying ways to retain that customer or re-earning the
business after the customer leaves the brand.
In short, CRM provides the runway for
modern loyalty to take off.
The concept of CRM is the same today as it was 20 years
ago, but at that time brands could handle only top-tier
customers. As brands aspire to market one-to-one — to
watch a person as he or she interacts with a brand and
then send special offers to continue the buying behavior
and brand affiliation — the technology must be cuttingedge. CRM has advanced enough so that marketers can
leverage granular data to achieve results in scale.
Based on scoring and statistical
models, Ansira can understand who
the customer is today and what kind
of customer he or she could be in the
future.
Create a “General Store” Experience
Remember the days when people strolled into a corner
store and the person behind the counter knew each
customer’s name, what items they were likely to purchase
(maybe even have them bagged and ready for checkout)
and took a moment to engage in a personal conversation
about work or family? The notion of a “general store
experience” is the foundation for one-to-one marketing.
Ansira helps brands move away from segmentation
and tiered customer groups to talk to individuals as
individuals. As customers move naturally around brand
marketing channels and touch points, whether forward or
backward, Ansira watches and delivers tailored messages
designed to influence behavior.
If Ansira sees that a customer’s buying habits change
from his or her norm, attempts are made to re-engage the
customer with new rewards. For example, if a customer
hasn’t visited a restaurant in a while, a surprise-anddelight reward for a free breakfast item may be sent.
Or, if a customer’s purchasing tendencies match other
customers who shop more frequently with the brand,
increases to the cadence or richness of offers to entice
incremental spending might be recommended. Collecting
and analyzing data makes this possible.
The integration of type of reward, message,
communication strategy, channel and experience is key to
supporting the customer’s experience. Every component
must be carefully orchestrated to deliver an experience
unique to a specific customer. Data drives these
individualized experiences, but collecting information is
only part of the formula. Leveraging the information
and using it to connect all aspects of the brand
experience, from channel preference and time of day
to frequency and creative execution, is essential for
engaging customers so they will want to experience
the brand for the long term.
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© 2016 Ansira. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
What Modern Loyalty
Really Means
Customer lifetime value is a
measurement that represents the
customer’s present and future values.
The Key to Market Differentiation
Data-driven marketing is sophisticated and complex,
but successfully leveraging information can change the
sales equation for a brand. Ansira helps clients create
customer experiences that align with brand objectives
and influence customer behavior.
The notion of a “general store
experience” is the foundation for
one-to-one marketing.
Using Customer Lifetime Value to Influence Outcomes
With a data-driven marketing strategy, a brand can score
and measure customer activities and create a framework
for the customer relationship.
One tool in the arsenal is customer lifetime value
(CLTV), which is a measurement that represents the
customer’s present and future values. CLTV is determined
by an analysis of a customer’s historical spend and
frequency with a brand, as well as forecasted spend and
frequency. Modern loyalty programs, and engagement
marketing in general, are designed to increase CLTV
over what is expected. As the customer stays with a
brand longer or spends more (or both), CLTV goes up.
Today’s marketplace is saturated with loyalty
programs of all kinds, and consumers need to feel
their time and effort are validated by rewards that
really matter to them, which is why modern loyalty
programs leveraging CRM solutions are so important.
The key to differentiation in today’s marketplace is to
create an individualized brand experience — one that
enables the brand to separate from the pack, stand out
and sell.
Visit Ansira.com for more on customer engagement
services and thought leadership. Follow us on Facebook
and LinkedIn.
Another strategy for using CLTV is to look at expected
CLTV. Statistical models can forecast what a person’s
CLTV will be, based on attributes that person shares with
others in a particular CLTV group. These factors can be
anything from income and gender to ethnicity and type
of home — any data point is fair game. This knowledge
can help guide a brand’s engagement marketing strategy
to influence customer behaviors in ways that entice
them to spend more time and money with the brand.
Conversely, those models can also help determine who is
unlikely to increase time and/or spend with a brand and
guide marketing efforts toward other customers.
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© 2016 Ansira. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.
What Modern Loyalty
Really Means
Ansira: The Data-Driven Results
Marketing Agency
Ansira continually engages customers along the entire
consumer life cycle and purchase funnel, using conversion
optimization to drive higher sales at a lower cost. Our
customer-centric approach applies data and analytics
to every interaction, helping clients maximize customer
profitability and optimize customer experiences. Designed
to adapt with our clients’ ever-changing consumer base,
we take the guesswork out of marketing.
Our repeatable programs integrate all channels and media
to steer consumers along the path to purchase – pre and
post– leading to predictive ROI modeling. While traditional
conversion optimization measures only one phase of the
conversion process, we measure each and every consumer
touchpoint to determine the best way to maximize
marketing spend. Every single program is viewed as an
opportunity to test, learn and optimize. Using multivariate
and A/B testing, Ansira continually scrutinizes a variety of
factors, including landing page effectiveness, messaging
and targeting methodologies. We take full advantage
of the latest in technology, message delivery and
measurement.
Contact Ansira at www.ansira.com
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© 2016 Ansira. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.