Are you focusing on personalizing the customer experience for your brand? You should be.
When it comes to enhancing the customer experience, personalization and loyalty marketing go hand-in-hand.
Whereas most types of marketing focus on customer acquisition, the very nature of loyalty marketing requires businesses to get to know their customers better – what they like, what they don’t like, when/where/how they shop, and so on.
Not only do the answers to these questions help you target your marketing more accurately, but they also allow you to personalize the customer experience.
To best describe how to personalize the customer experience with loyalty marketing, I’m going to resort to a classic, tried and tested approach: the 5 W’s (…and 1 H).
- WHAT is personalization?
- WHY personalize the customer experience with loyalty marketing?
- WHEN to engage customers with this technique
- WHERE to engage customers with this technique
- WHO is currently doing personalization best?
- HOW to personalize the customer experience with loyalty marketing
What is personalization?
In a nutshell, personalization is the process of using a customer’s data to tailor their experience with your brand, by catering to their unique preferences.
This data can be anything from their age and budget, to how often they make purchases and whether they prefer to shop online or in person.
Addressing a customer by his or her first name in email marketing is a basic form of personalization, while cross-selling a product that is likely to appeal to them (based on their previous interactions with your business) is a more sophisticated form of personalization.
Both techniques, however, use the same tool – customer data.
Why personalize the customer experience with loyalty marketing?
To put it simply; it’s much easier to retain customers when your business understands their needs, and even tailors its service to cater for these needs.
What good is it to send an 80-year-old woman an “exclusive offer” for 20% off your entire range of men’s deodorant and aftershave? Is your ethically-minded customer who only shops for sustainable products really going to be tempted by a free set of plastic cutlery with the purchase of any barbecue steak kit?
On the other hand, the keen home decorator who regularly clears your shop shelves of potted plants might be interested in 50% off scented candles from now until next Friday, or a free cushion with the purchase of any bed linen set.
Similarly, your online shoppers are going to be far more excited about a “free shipping day” promotion, while brick-and-mortar customers might prefer skip-the-queue benefits… it all depends on what kind of business you have.
The takeaway is that, by personalizing each customer’s experience based on things like previous purchases, frequency of visit, average basket-size and other shopping habits, you can drastically boost their brand loyalty.
It provides them with a more convenient and emotionally connected shopping experience, which makes people feel valued and appreciated, rather than that feeling of being “just another customer”.
When to engage customers with this technique
Any touchpoint the customer has with your business is an opportunity.
It’s an opportunity to attain more data to further personalize the customer experience, and it’s also an opportunity to engage them with personalized communications, based on the data you’ve already accumulated on them.
Here are some of the key moments in a customer’s journey that a brand can personalize the customer experience with loyalty marketing:
- Recommended products while they are browsing your website on their mobile device (based on previous product searches on the same device)
- Exclusive offers to incentivize an upsell/cross-sell opportunity when the customer is at the checkout in your online store
- Asking the customer if they would like to place the same order as last time, as soon as they open the app or navigate to your business’s website
- Email, text or push notifications offering free shipping or upgrades if the customer purchases the item they have been browsing on your website before the end of the week
By capitalizing on these key customer touchpoints, you can leverage personalization to create a stronger emotional connection between the consumer and the brand. Some of the techniques listed above also create a sense of urgency and/or exclusivity.
Where to engage customers with this technique?
In person, on social media, in your online store, via their mobile device, through targeted email marketing… Any channel that provides your business with a direct line of communication with the customer, is an opportunity to attain more data and further personalize their brand experience.
Who is currently doing personalization best?
Sephora has been at the forefront of marketing trends for years, but the cosmetics giant has made impressive leaps forward in recent years with the introduction of its digital loyalty program, Sephora Beauty Insider.
Beauty Insider members can earn loyalty points for any number of behaviors; not just spending. Sephora rewards members for sharing content, referring friends, reviewing products and creating their own user-generated content (like YouTube tutorials, blogs and Instagram posts).
These activities produce far more data than a simple transaction can, and this allows Sephora to further refine each member’s personalized brand experience.
Image Source: Sephora
Of course, it should come as no surprise that McDonald’s has mastered the art of personalization too.
The first layer of personalization in the mymaccas app is apparent for everyone to see – customize your own burgers and sides, find your nearest McDonald’s restaurant, order and pay in advance for more efficient pick-up.
However, the second layer of personalization is where McDonald’s really starts to reel you in, tempting you with push notifications offering “Buy 1 Get 1 Free” deals right as lunch-time approaches.
And is it purely coincidence that the restaurant chain sent you a text for a 2-for1 deal on the one day that you happened to be meeting a friend for lunch…? Or how about the fact that you received a special 50% offer via push notification just as you happened to come within a few blocks of your nearest McDonald’s restaurant. Hmmm…
How to personalize the customer experience with loyalty marketing
Let’s pretend you’ve just welcomed someone into your house.
If you don’t know this person from a bar of soap (excuse the Australian expression), the only way to have full confidence that you can offer them any beverage of their choosing is to fill your cabinets with tea, coffee, sugar, honey, lemon etc., and fill your fridge with beer, wine and soft drinks.
However, if you have welcomed this guest into your house before, you will have a better idea of their preferences. If they had a lemon tea last time, you can reasonably assume that they might like a lemon tea again this time. By asking the question, “Would you like a lemon tea?”, you are engaging them with targeted marketing.
If a good friend of yours comes over and immediately starts complaining about their job, and you know that they usually drink a beer after work but if they’ve had a hard day they prefer a whisky, you might instinctively offer them a whisky based on the circumstances.
This is also targeted marketing, made far more effective and accurate because you have much more data to work with.
My point is, the key to good personalization is customer data, and one of the best ways to accumulate customer data is through a well -structured digital loyalty program.
And no, I’m not talking about your classic “Buy X, Get Y” punch card system, although simplicity is the key to any successful customer loyalty marketing plan.
By using receipt scan technology to validate a customer’s loyalty points through a digital rewards app, your business gains access to the following data from every single transaction:
- What they bought
- What else they bought
- Where they bought it
- What time they bought it
Pool a few of these transactions together, and you start to get an idea of:
- How often they buy your products
- Where they buy your products
- What they tend to buy alongside your products
This data can help brands determine what their customer preferences are, what days and times they tend to shop, and a wealth of other information. Based on this information, the brand can send targeted marketing that appeals to this customer’s specific needs.
“You like to shop on the weekends? Here’s a voucher for 20% off selected accessories when you make a purchase this weekend.”
“You enjoy our choc chip cookies? Try a free slice of our all-new butterscotch cake with the purchase of any hot drink next time you’re in.”
“Don’t feel comfortable visiting our local store this month because of COVID-19 restrictions? Enjoy free shipping on all online purchases until the 31st!”
Just like that, your customers are being treated to a personalized experience with minimal effort and resources on your end.
With the right technology, a digital loyalty program provides businesses with the means to offer customers a personalized experience that is tailored to their unique needs and preferences.