The Australian Loyalty Association’s 2024 Loyalty Insights Report unlocks a range of insights which loyalty marketers can apply across their marketing strategies. The report quantifies the opportunity for loyalty programs who meet their members’ personalisation expectations and use data-driven approaches to tailor each member’s experience. As a platinum sponsor of the ALA for a number of years, IVE works closely with clients to leverage these robust insights to drive seamless loyalty experiences for their members.
Achieving this balance of 1:1 data-driven loyalty experiences against consumers’ expectations is an ongoing challenge which every loyalty marketer experiences. In this blog post, we explore IVE’s recommended “do’s and don’ts” when loyalty marketers approach personalising their member communications to deliver effective and respectful loyalty experiences in today’s hyper-personalised, data-driven world.
In our experience, there are 5 key areas to consider:
- Collection and responsible use of loyalty member data
- Loyalty member segmentation
- Personalisation of communications
- Relevancy of 1:1 loyalty rewards and experiences
- Testing and optimisation of loyalty experiences
The Do’s (and don’ts) of Personalisation in Loyalty Marketing
- Collection and responsible use of loyalty member data:
- Report insight:
- “Less than 6 in 10 respondents are happy to share their data”. However, “around half expect you to know their preferences” and have them be accommodated.
- Do – IVE’s recommended actions:
- Do gather customer data, but ensure you have explicit consent and user-defined preferences which you intend to accommodate.
- Do be transparent about your data usage and data security policies to provide loyalty member peace of mind.
- Do use this provided data to tailor loyalty experiences based on members insights, stated and inferred preferences, engagement behaviours and purchase history.
- Don’t: watch out for:
- Don’t overstep privacy boundaries – put yourself in the member’s shoes, and ask yourself “How will my data be responsibly used, with the view to add value to me through the loyalty program?” Ensure you have a clear answer and let this guide your marketing strategies.
- Don’t collect sensitive or unnecessary customer data without clear consent, or without considered intent on how it will be used to tailor their loyalty experience.
- Don’t share or sell customer data to third parties without your members’ permission.
- Loyalty member segmentation:
- Report insight:
- The report confirms there are benefit preference differences between generations. At a minimum, age can provide some generalisations as to what is most important to each age group cohort.
- Do: recommended actions:
- Do segment your audience based on relevant criteria, such as demographics, purchase history, or browsing behaviour.
- Do tailor loyalty rewards and communications to specific segments for relevance.
- Do watch engagement behaviours to identify engagement with assumed benefits preferences, moving into confirmed benefits preferences over the course of time. Use this information to create ‘lookalike’ offers with similar audiences and infer personalisation opportunities.
- Don’t: watch out for:
- Don’t ignore the timeliness of amending your personalisation approach based on updates to customer preferences,
- Don’t ignore opt out requests.
- Don’t assume your view on how to segment your audiences aligns with the most effective approach to matching target audience with personalised offers and experiences. A test and learn approach is always recommended (see below for more detail).
- Personalisation of communications:
- Report insight:
- “69% of respondents have one to three brand preferences.”
- Do: recommended actions:
- Do use data to do more than address customers by their first name. Although this is a sound starting point, use preferences and transactional data to tailor loyalty experiences and offers across all loyalty program touchpoints.
- Do use machine learning to enrich your member records and provide your loyalty marketers with the “next best brand” data point they need to propose a targeted list of brands to cross-sell.
- Do use dynamic content to showcase products or offers based on individual preferences and these ‘next best’ adjacent brands.
- Don’t: watch out for:
- Don’t use overly intrusive tactics, such as mentioning customers’ recent website visits.
- Don’t overuse personalisation to the point where it becomes unnerving – examples may include “recent behaviours”, leading members to feel as though they’re being monitored.
- Don’t use real-time triggers or loyalty communications in every case. Be mindful of the response times of your communications and loyalty offers.
- Relevancy of 1:1 loyalty rewards and experiences:
- Report insight:
- When loyalty members are engaged with a program, “87% display an increase in spend behaviour”.
- Recommended actions:
- Do provide loyalty rewards that align with customers’ past interactions and preferences.
- Do review and refine tiered rewards to motivate customers to progress in your loyalty program.
- Do explore and text benefits which are known to be important to your overall member base – however, apply them on a 1:1 basis to see what resonates with each individual member.
- Watch out for:
- Don’t neglect transparency – ensure your members are aware why they may be receiving particular loyalty offers and experiences.
- Don’t hide the fact that you’re using personalisation. Be transparent about your data usage and personalisation practices.
- Don’t send personalised communications that appear generic – customers should know why they’re receiving a particular message or offer.
- Testing and optimisation of loyalty experiences:
- Report insight:
- 82% of respondents say the most consistent driver of loyalty program satisfaction is “ease of how the program works”, meaning that simplicity of program approach may be the most effective initial strategy. Given this, initial loyal experiences and offers may be more generic in nature. However, if loyalty programs are to move to a more tailored 1:1 approach, a test and optimise approach is required to progress towards deeper personalisation.
- Do: recommended actions:
- Do A/B testing to fine-tune personalisation elements within communications, such as subject lines, content, and send time.
- Do continuously optimise your personalisation strategy based on 1:1 performance metrics and customer engagement.
- Do be clear on the ownership of testing and optimisation within the team and embed a culture of testing and learning within the team. Budget time and resources towards these initiatives, making these as important as getting campaign into market.
- Don’t: watch out for:
- Don’t make blind assumptions – while testing and optimising should always follow a hypothesis-driven approach, avoid making blanket 1:1 assumptions on why individual loyalty member’s experience should be tested.
- Don’t assume customer preferences solely based on limited data points – carefully consider what is known, and what is assumed.
- Don’t stereotype or make assumptions about individuals based on demographics alone. While “birds of a feather” may “flock together”, you want your loyalty experiences to be as unique as the members in your program!
Personalisation in loyalty marketing can be a game-changer when executed correctly. It enhances the customer experience, fosters loyalty, and drives business growth. However, it’s crucial to approach personalisation with care, respecting customer privacy and boundaries. By following these key recommendations, your loyalty program can create personalised experiences that resonate with your audience, maintain trust and create long-term relationships with your program.
To download the full Australian Loyalty Association’s 2024 Key Insights Report, visit https://australianloyaltyassociation.com/australian-loyalty-association-2022-annual-loyalty-insights-report.
Should you wish to discuss any challenges you are facing with your loyalty program, the IVE team have a team of data, martech and customer loyalty experts who can support you. Please contact the IVE team using the “How can we help you?” form below.
