Consumer sentiment is clear: the current loyalty model is not working. There is an expectation that brands will engage with customers in a highly personalized manner at the time and channel of the customer’s preference. And despite knowing this expectation exists, most companies are nowhere near delivering on it. This is in part due to many of these offending companies lacking the technological resources to adequately address customer demands. Fear not though retailers--we understand your plight, and are happy to tell you there is a solution: loyalty marketing automation. In this post, we’re breaking down four problems loyalty marketing automation solves for retailers.

Disparate customer view

Retailers have siloed databases across systems producing “multiple single views” of the customer or a single historical view of the customer that is non-operational. The customer experience of many retailers is missing recognition in real time, which means that members of their rewards programs have to wait several weeks for recognition instead of receiving rewards at the point of sale. Upgraded technology gives retailers the ability to marry profiles to create a single profile that delivers consistent, personalized experiences in real time.

In contrast, loyalty marketing automation enables retailers to create a single profile in the cloud that is dynamic, real-time and operational. “Multichannel "must have" capabilities for retailers include providing the customer with a cross-channel experience that is connected, continuous, contiguous, convenient, customized and collaborative” (Gartner).

Manual segmentation lists and batch files

Retailers with legacy technology are forced to build promotions on list-based architecture that requires several weeks to prepare an individual offer. Retailers have to query a CRM database to create segmentation lists and then send batch files to various internal and external systems, which can take days or even weeks.

Instead, loyalty marketing automation allows retailers to automate real-time segmentation that changes with every customer event and syncs in real time with other systems to trigger campaigns. Retailers can ingest thousands of point of sale transactions per second, evaluate each transaction based on preconfigured rules and determine within milliseconds if the consumer is eligible for an offer, reducing lead-time to set up a promotion, test and launch from 5-9 weeks to real time.

Loyalty based on historical transactional data only

Personalization must rank among the top 10 marketing buzzwords of the past five years. A lot of retailers are doing something to personalize the customer experience, but few have mastered the one-to-one, tailormade interactions that actually impact a customer’s perception and future relationship with your brand. Many retailers market to their database of loyalty program members solely based on a customer’s past transactions.  

According to Capgemini, only 11% of Loyalty Programs offer personalized rewards based on a customer’s purchase history or location data. Undoubtedly this significantly contributes to the finding in the same report that almost 90% of social media sentiment on loyalty programs is negative.

With loyalty marketing automation, retailers can take it one step further by using that historical purchase activity to predict product preference ratings for every user and product pair via an implicit feedback recommendation engine. 74% of consumers would buy more if rewards were better/more tailored to them” according to new research from ICLP. Brands that take their consumer engagement from one dimensional to dynamic with features like “next best offer” create a hyper-personalized user experience, building long-lasting loyalty in the process.  

Latent, scheduled campaigns based on brand marketing events

Most retailers are limited to marketing around static, pre-determined events.

With loyalty marketing automation, retailers have the ability to engage consumers dynamically on a one-to-one basis. Personalization can reduce acquisition costs by as much as 50%, lift revenues by 5-15%, and increase the efficiency of marketing spend by 10-30% (McKinsey). The customer journey isn’t linear, so the way you engage them shouldn’t be either.

We all know that personalized experiences are imperative to cultivating loyalty. Being able to deliver these experiences is not possible for many retailers today due to their current technology stack. Subpar technology not only under serves customers, but also wastes money for organizations and wastes time for the marketing, data and IT teams managing the systems. So, out with the old loyalty model and old, legacy technology and in with loyalty marketing automation. Problems solved!