By Matt Harris, Co-Founder of Dyspatch
As the old saying has it,“Strategy without execution is hallucination.” This is precisely why efforts to improve customer experience can be hit or miss. Despite all their talk about personalization and creating exceptional customer journeys, marketers often fail to execute and instead offer disjointed, alienating experiences.
A Starbucks customer and loyalty app user, for instance, might be justifiably annoyed when Starbucks’ “personalized” offers repeatedly include deals on breakfast items containing eggs, meat, and cheese, despite the fact that they have nearly a decade’s worth of purchase history showing the vegan customer has never ordered a single such item.
The disconnect happens in the other direction as well — purchase experiences that fail to recognize loyalty status. For example, an airline’s loyalty program member is logged into the brand’s website, booking a flight or browsing vacation packages, but nowhere during either experience are the customer’s loyalty status or available benefits presented to them. There’s no banner indicating, ‘You have X number of points to use toward this flight’, or ‘Your Gold loyalty status entitles you and your guest to one free checked bag when booking this package’. Loyalty benefits like these offer customers valuable incentive to purchase, so failing to surface them while customers are browsing or ordering means revenue-generating opportunities are missed.
These aren’t anomalies. Unfortunately, treating valued customers like strangers is the norm rather than the exception. A recent study from VB Insight found that 80 percent of consumer-facing companies don’t understand their customers beyond basic demographics and purchase history. Customers often discover this when their brands fail to recognize them as unique individuals. This lack of recognition can be especially jarring when consumers who have opted in to loyalty programs find their loyalty goes unacknowledged as they move between the brand’s website, app, and email, both promotional and transactional.
Brands who are guilty of this disconnect are not only missing out on opportunities to hyper-personalize and generate revenue, they are alienating their customers. The good news for consumers comes from the many brands who are overcoming common obstacles to create effective, omnichannel loyalty programs.
Missing the Opportunity to Personalize
Despite the wealth of data marketers often have at their disposal, loyalty programs still aren’t fully leveraged to personalize across the customer journey. Marketers are failing to surface loyalty status, offers, and rewards across in-store, website, app, and email touchpoints, resulting in disconnected customer experiences. Nor are they adequately connecting in-store, website, app, and email experiences within loyalty programs.
Research from Bond Brand Loyalty found that 79 percent of consumers surveyed find highly personalized loyalty programs satisfying. Loyalty programs that make customers feel special and recognized had 2.7 times more satisfied members, according to the research. It’s just common sense. We all prefer loyalty programs that recognize not just our loyalty but also our particular preferences, rewarding us with personally relevant offers. For instance, an in-store only coupon offered to a loyalty program member who shops exclusively online won’t win you any Brownie points. Programs that treat individual customers like one of many offer limited value.
Ideally, loyalty programs need to be reinforced across every digital touchpoint, especially transactional emails. If a customer uses a branded app to make a purchase for pick up in-store, then that data should inform all communications going forward, whether in-app, online, or in email. Unfortunately, it doesn’t always work that way. A recent survey by retail consultancy L2 found that brands are generally poor at integrating their loyalty programs into their digital touch points. Some 59 percent of brands don’t promote their loyalty programs on their homepages and only 6 percent of brands mentioned their loyalty programs in their emails. As a result, only 25 percent of customers are satisfied with the level of personalization in their loyalty programs.
The Culprit: Silos and Lack of Buy-In
For marketers, the reasons customers have disjointed experiences with loyalty programs should be no surprise. The biggest reason that companies don’t work from a centralized customer database is simply that they don’t have one: the information is siloed. Data from interactions with email, apps, online, and in-store is collected by different parts of the company and stored in an assortment of databases. Rare is the company that integrates customer data from all sources.
Though companies are often painfully aware of these data silos, the explosion of customer touchpoints — including IoT and chatbots — makes it increasingly important to integrate all that information. It also makes it increasingly difficult.
Which brings me to the second biggest reason for disjointed customer experiences: lack of buy-in from executives. Unless the customer has a champion within the organization, there is often little motivation for integrating customer data from all sources to offer a consistent, personalized experience. The first step to eliminating — or at least connecting — data silos to improve the customer experience is convincing the C-suite that doing so will positively, and significantly, impact the bottom line.
Brands That Are Doing It Right
Despite the hurdles, some brands are able to cross the silo divide and run personalized loyalty programs across various digital touchpoints. Tarte Cosmetics offers its customers points for shopping on their website and engaging with the brand on social media. Even just visiting the Tarte website will earn the user loyalty points. Customers who earn their way through the levels of the program receive free products, surprise gifts, and special shipping rates.
Designer Shoe Warehouse (DSW) runs a program that rewards customers with points for each purchase. In 2017, the retailer began using personalized emails to remind customers what their status is within the program and which deals they’ll be eligible for in the near future. The emails also include a rundown of how long the consumer has been with the brand, how many points they’ve accumulated, and how much they’ve saved in the previous two years by being in the program. Starbucks does a similar ‘year in review’ email as well.
Customers who receive such personalized email messaging naturally feel that the retailer not only understands them but appreciates them. That’s a far cry from the experiences most consumers have with loyalty programs. Brands that make the effort to orchestrate such experiences are miles ahead of their competitors, creating programs that actually do what they’re supposed to: encourage loyalty by leveraging the power of integrated data.