on February 18, 2022 Customer Loyalty Loyalty Data

How Loyalty Programs Are Important For Collecting First-Party Data

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In recent years, customer experience has become more important within the buying journey. In order to provide better customer experiences, companies have to understand different elements such as how customers use their products, where they purchase the products, and the multiple factors that impact their purchase decisions. With the ongoing disappearance of cookies and other ways to capture 3rd-party data, companies are looking for new and legally compliant methods for collecting customer data. 

A loyalty program is an especially valuable method for compliantly capturing customer data because it enables brands to directly use collected data to create experiences that build emotional loyalty among their customers. Emotional loyalty or relational loyalty is when the bond between the brand and the customer is encompasses more than just transactions and incentives. Instead emotional loyalty is built through personalized engagements that focus on the consumer's different wants and needs, and works to build consumer trust and belief in the brand's vision from the very first interaction.

To build these types of strong customer-brand relationships, brands first need to identify and understand the likes, dislikes, and habits of their consumers. Acquiring this customer data in turn helps create the customer experiences and engagement that lead to greater customer loyalty. You want to have an authentic relationship with your customers and that isn’t possible if they are strangers to you!

This is where loyalty programs play a huge part. They provide a direction connection between brand and consumer, opening up channels of communication that provide valuable insights into customer behaviors and motivations. 

Here are a couple of ways that loyalty programs capture data:

  • Member Profile Completion

Member profiles are a great source of quality customer data for companies because they give members the opportunity to voluntarily share more insights about their preferences or lives. Companies can use member profiles to acquire in-depth customer insights beyond just the basic information like name or address. One example is if a pet supply company lets program members to add all their pets to their member profile along with what activities they like to do with their pets in their free time such as hiking, playing in water, practicing tricks, or dressing them up in outfits. Doing so opens up more opportunities for this company to provide highly personalized content and offers to their members.  

Setting up a member profile does not have to be a long task that risks putting off new members from signing up. If you keep the must-have information short and simple this allows members to answer the more in-depth questions on their profile at a later date and time. This gives companies the chance to offer rewards for answering the longer questions as an incentive to share more of their data. 

  • Survey or Questionnaire Responses 

Surveys and questionnaires are a very important part of the buyers journey because they allow companies to ask consumers a range of valuable questions, both general and in-depth. A simple survey can help you get a better understanding why a product was returned or if a customer enjoyed the reward that they redeemed. A study by Salesforce shows that 79% of customers are willing to share relevant information about themselves  in exchange for contextualized interactions in which they’re immediately known and understood. Surveys or questionnaires are an easy way for companies to understand what is and isn't working with their loyalty program and where they can improve. 

  • Member or Customer Activity History 

There are many different pros to understanding a member or customer's activity history. You don’t only see how much they bought but you can also see when they use a discount, coupon code, different promotional offers, and which retailers they shopped at. Members are also offered additional benefits and using their history, you are able to see when they use those benefits and what they used them on. On top of that, you are able to see if they shopped offers from partner companies or organizations. For example, in the Metrolink Partner Program, transit riders are offered a discount for purchasing drinks at a restaurant that partners with Metrolink. 


Putting Data To Good Use

Now that you have gathered the data, it is time to put it to use. Companies do not want to put out marketing strategies based on inaccurate data, 54% of business decisions are influenced by marketing analysis. So by collecting all of this data you now have better insights on your consumers and can more accurately gauge the best way to approach them with different targeted offers and promotions. By doing this it will reduce customer churn because you are building a relationship with these members and using this collected data it should heavily influence your marketing strategies. Even something as simple as birthday emails or emails to notify consumers that their membership are expiring soon make your loyalty program stand out amongst the rest.

Now that you understand the importance of understanding first-party data, what's next? Let us help you! Get in touch with us today to see how you can use the data you gathered to boost your loyalty program!