Tech Guest Viewpoint: The Importance of Data in Customer Loyalty
By Gitte Amstrup Sandlykke, chief marketing Officer, Targit
The success or failure of any business in this crowded and complex marketplace comes down to whether business goals are met – maintaining customer loyalty is chief among them. However, many retailers are beginning to confuse loyalty with promotions, loyalty cards and awards, undermining brand equity rather than building stronger ties with their customers.
The top retailers know that in order to be successful and stay ahead of the competition, customer loyalty is vital. But why is the focus on customer loyalty so important? Purely from a cost perspective, gaining a new customer is very expensive compared to keeping the existing ones, since increasing your customer base takes significant investment in marketing and special offers to get attention from new audiences.
In order to stay top-of-mind with customers and ensure their happiness, there must be consistent communication through data-driven omnichannel marketing. Depending on the audience, that could mean social media, direct mail, mobile apps, e-newsletters, loyalty clubs, and advertising. Not to mention the actual purchasing that's happening online and in brick and mortar stores – there is a lot that needs to be analyzed.
Understanding the ideal customer is the first step toward increasing customer loyalty, and then tracking the data that results from their interactions with those data-informed marketing touch points will help to craft the best strategy possible.
The best way to learn more about your customer is to think big, and then hone in on the specifics by segmenting your audience through demographic or social data. For example, is your primary audience working mothers, or sports-crazed fans? How old are they? Figuring out these questions from the start will help you speak their language and get in front of them in their daily lives. Once the ‘perfect customer’ is identified, you can begin pulling data from both internal and external sources that can even further inform your marketing touch points.
By having multiple smart touch-points throughout several channels within your business strategy, marketers will see the following positive impacts on their efforts:
- You’ll be where your customers are: Omnichannel marketing will increase the likelihood of your message reaching the target audience. In today's world of high stimulation and low attention spans, multiple meaningful interactions better ensure your message is absorbed by its intended audience at least once.
- Your customers can become your friends: Gaining access to valuable customer data helps you get to know your customers better and provide them with products, deals and experiences they expect. When you provide relevant offers, you will ultimately get a better response.
- Your revenue goals will soar: The more customer loyalty the company sees, the more likely it is that your sales will increase.
So how does all of this impact your business? Generating the right data about your customers leads to a greater understanding of who they are and what they want. It also helps you measure and quantify your efforts as a retailer.
The more insight you have on your ideal customer, the better you're able to target those touch point campaigns. For example, what are customers buying online as opposed to in stores? Does the buying patter differ across geographies? Which age group are we better at converting into buyers, and which channels or media touch points do different age groups prefer?
This knowledge helps better shape campaigns, such as targeted newsletters and discount opportunities. Fortunately, gathering and analyzing the data needed to create the perfect marketing campaign is the easiest of all with the right comprehensive business intelligence and analytics platform. Not only will you gain insight into which campaigns were most popular, but you can drill down into clicks, locations, and resulting actions from those who interact with your brand in any way online.
To round out the process, your supply chain must be fully operational, ensuring you deliver a high-quality product that lives up to promises made in initial marketing efforts. Companies need to focus on their leading indicators, or more predictive markers than lagging indicators that show past results, including expected weather delays, logistical considerations, efficient returns, etc.
A lack of visibility around inefficiencies makes it difficult, and sometimes impossible, to assist your customers well and give them the experience they have grown to expect from your brand.
The great challenge is to know to whom you’re marketing. Don’t limit yourself from the very beginning, but be open to what your data and marketing experiments show you. You may be surprised by who your true fans are.