blog | 5 min read

Three Ways a CDP Boosts Your Loyalty Program

December 1, 2022

Loyalty is the not-so-secret ingredient to running a successful consumer business — the top 5% of a brand’s customers often account for up to 50% of their revenue, and keeping an existing customer can be five times more cost effective than acquiring a new customer — but in today’s crowded digital world, people have to navigate their way through a maze of options. Consumers want to feel like brands know who they are and what matters to them, and for brands to deepen a customer’s willingness to continue a relationship with them and make repeat purchases over a sustained period of time, they must consistently provide good experiences and stellar service. 

To foster these kinds of relationships, many companies use loyalty programs, which can create a self-sustaining cycle of positive growth and retention for the business. 

For example, David Jones has been a customer of CheeseCorp for several years, but always checked out as a guest. After seeing a particularly appealing offer for discounted cheeses, David downloaded the mobile app and enrolled in their loyalty program. Now, CheeseCorp knows who David is as a customer and can build a robust, first-party customer profile tied to opted-in Personal Identifiable Information (PII). This allows them to observe his behaviors, the channels he responds to, and the categories he purchases from, along with myriad other inputs. The more David interacts with CheeseCorp, the more they learn and the more they can personalize the brand experience for him. 

Companies who have loyalty programs, or are in the process of launching one, should always keep the customer front and center — not just conceptually or as a slogan, but strategically and operationally. Brands should look at their data and anticipate what their customers expect, and tailor it to meet the needs of their target customers. This works wonders in standard customer interactions, and it’s even more powerful within a loyalty program. 

How a Customer Data Platform supercharges your loyalty program

To provide the level of excellence consumers expect, brands need clean, accurate profiles — no small feat, considering the amount of data that companies collect every day. CDPs are purpose-built to decipher scrambled customer data and identify your best customers. Understanding customers allows brands to plan ahead and deliver personalized experiences at scale.

Understanding and personalization are two critical elements when it comes to powering up your loyalty program: you need to know how many customers you have, who is enrolled in the loyalty program and who isn't, and what their preferences and tendencies are. That lets you formulate an approach to bring more people in and make the most of the relationships with the people who are already enrolled. With the solid foundation of data a CDP provides, brands can: 

Increase loyalty membership

To entice customers to your loyalty program, make it impossible to turn down by using the customer data you already have to personalize offers to join. Boost the quality by offering exclusive benefits, strong discounts, and products based on customer preferences. Once you have a good amount of customers enrolled, you can then build a strong profile of their best loyalty customers and use that to identify other non-loyalty customers who share common characteristics, for example, channel preference, or frequency of orders. Take those profiles and use them to build lookalike audiences. Once you have a picture of your customer, personalize the offer with a hook that matters to them — if your consumer cares about timeliness, emphasize your focus on quick deliveries.

Re-ignite lapsed loyalty members

Once you have customers enrolled and activated in the program, you have a golden chance to nurture them over time with hyper-personalized loyalty journeys and turn them from new members into loyalty champions. Unfortunately, it’s all too common for brands to make the mistake of focusing solely on optimizing the perks and rewards of the loyalty program and then neglecting to cater to the customers they’ve spent time and money to bring in. Re-engage lapsed customers with emotional propositions — for example, offer them discounts on their birthday, or acknowledge a shared milestone like the anniversary of the day they joined your program. 

Keep learning to stay on top

The work doesn’t stop once your loyalty program is full of faithful members. To keep evolving, brands have to stay up-to-date on customer’s shifting expectations, and with loyalty members, brands have a ready-made panel of judges. Use your loyalty customers for testing and experimentation and debut new products and services with them first. By using them as a springboard, companies are able to get a feel of how other consumers will respond. Pro tip: always remember to include a hold-out group to measure incremental revenue. 

The more you cater to loyal customers, the more they’ll engage, giving you more data and allowing you to improve personalization and relevancy at scale — research from BCG found a 75% increase in member spending with tailored offers. The right CDP will place customers at the center of your business, allowing you to set strategies and tactics based on customer behavior and speak to them like the individuals they are.

Learn more about how Amperity can boost the effectiveness of a loyalty program in our guide, Leveling-up Your Loyalty Program with a Customer Data Platform.