What is Data Telling About Your Customers

Well-created consumer profiles help increase sales, but there is no doubt that marketers often do not even realize they are not using the full potential of the information about their consumers. So how do you use this data, build an effective loyalty program and mark out in the market? Show us your data and we will tell you who your customers are – we will implement an effective program adapted to consumers’ needs and expectations.

Loyalty programs are useful to optimize company costs and identify a significant portion of customers, allowing you to get to know your consumers, personalize offers, and improve the overall brand experience. There is certainly no one-size-fits-all loyalty program, so every decision should be well thought out and supported by advance analysis. At Loyalty Point, we have developed a universal way to holistically analyze the feasibility of implementing and matching loyalty program features.  

Knowledge instead of intuition

Loyalty Point’s proprietary methodology called ‘Raport Otwarcia’ is a process that we have implemented more than twenty times so far. This approach has proven successful in a wide range of industries, from NGOs to large multinational corporations.

There are two key stages in ‘Raport Otwarcia’:

1. pre-implementation analysis
2. strategy development based on the insights gained during the analysis

The process is very methodical, and in addition to analyzing the data available in the organization, it also involves reviewing available IT tools, team structures and processes.

Our approach is characterized by partnership and result-oriented attitude what is very important. We are committed to building long-term relationships with our customers, so ‘Raport Otwarcia’ is just an introduction to cooperation, not the culminating project. That causes us to look in the long term at the ROI of the recommended actions and it happens that we advise the customer against implementing a loyalty program based on classic solutions. There are situations when we recommend the setup of a Communication Platform, where the main element is providing consumers or other groups with relevant information, and the loyalty mechanisms are in the background of our actions.

During the pre-implementation analysis firstly we focus on the available data. These are transactional data, data related to interaction, as well as many sources available, such as purchasing power, data from the Statistics Poland, information on client’s media and advertising spending and about his competitors, and a number of other information from the market. We also look at a client’s previous marketing activities, analyzing their effects and benchmarking them against best market practices in particular categories.

Importantly, ‘Raport Otwarcia’ is equally effective for entities that are just considering the implementation of a program as it is for those that already have a loyalty program in place.

Loyalty program – what do you know about your customers?

The customer base was used to send SMS messages informing about seasonal discounts. There was no personalization or segmentation was used. The company’s approach was limited to the belief that consumers were only interested in discount offers and cut prices. As the base grew in size, the cost of promotion and direct communication grew faster than ROI. A change in approach was needed. There is where ‘Raport Otwarcia’ came in.

In order to verify the customer base, we decided to analyze contents of the shopping baskets and transaction data. We verified which products customers choose (women’s, men’s, children’s), what products they combine them with and when they shop (during sales or a new collection). Ultimately, we were able to identify 50 key customer characteristics. Thanks to the segmentation of the customer base we were able to describe precisely the behavior and shopping habits of different groups. Some customers did indeed decide to buy products at discount prices, but there was also a large group of people who did not use the promotional offer at all. They preferred novelties or the highest quality products.

The key role of employees

In retail, it is very important to analyze the actions of shop assistants, as they are the ones who have direct contact with customers. Employees should be ambassadors of the program, promoting and encouraging customers to register transactions with loyalty cards. Conducting an audit among customer service allows us to find out how much employees know about the program strategy and promote it among customers. It is relatively easy to show how much an organization loses from the wrong attitude. One such example is the % of loyalty card transactions. Differences between individual shop assistants sometimes reach several dozen percent. The result is that we cannot attribute some of the transactions to a participant, so we lose of a large portion of knowledge that could learn recommendation models and communication paths.

In this case Thanks to the Opening Report, we were able to develop an approach to personalize offers taking into account all consumer groups of the brand. Understanding customers and differentiating communications proved to be the turning point for the loyalty program. Without an in-depth analysis, the company had an incomplete image of its customers’ profiles, making communication unattractive for many. In addition, it was possible to optimize the store’s offer in terms of customer preferences. The result was a 20% increase in sales performance on key campaign indicators. As it turned out, the client without data science analysis did not realize the potential of the data they had.

‘Raport Otwarcia’ is also a helpful tool in optimizing other areas of the organization. During the pre-implementation analysis we try to get to know the structure of the company as well as possible, therefore we talk to various departments (marketing, sales, finance, IT, complaints deparment) in order to gain as full knowledge as possible about the barriers and potential of processes and tools.

As a result of the above activities, the recommendation of strategy and future actions will be based on reliable knowledge that a given company possesses, and not only on benchmarks and trends. Combined with our know-how and experience, ‘Raport Otwarcia’ will be succeed.