People respond to what is relevant to their needs, desires and motivations. With the help of customer loyalty data, companies are learning about the behaviors of their customers and acting on that knowledge to identify their best and highest-potential customers and personalize their communications. They are beginning to understand how communicating with (not at) their customers in meaningful ways can encourage the customer to consistently choose their brand and ensure long-term growth and success.
Where personalization was once defined as a greeting which used the customer’s name, personalized communications reflect a deep understanding, appreciation and respect for the customer. By putting the customer at the center of their marketing strategy, companies can ensure that the right content goes to the right customers through the right channels at the right time. And companies can also measure the effects of those communications to understand how to continue to be relevant.
Effectively engaging customers through direct marketing channels hinges on several key principles:
1. Start with the customer data. By using connected data to define a single view of a company’s best customers, organizations can understand customer behavior across online, in-store and direct mail. People respond differently to the same marketing activations and it is important to recognize how customers have responded in the past to inform the next communication.
2. Recognize and reward your best customers. The primary purpose of personalized communication must be to reward customers by giving them a little bit more of what they want and need. If the offer doesn’t do that, then you see lower redemption rates and lower sales uplift, reducing your return on investment. It also weakens your customer’s preference for your brand if they feel like you don’t understand or respect them.
3. Remain communication channel agnostic. Keeping a customer-centric lens on measurement tools and tactics will further cement the alignment between data, decision-making and successful results. Let the customer and the data decide the best communication vehicle. The more effective the channel, the more it should be used. Tailoring channel usage based on the behavior of a customer is another method to deliver relevance and reward your best customers. The best channels to use are the ones that deliver the greatest effectiveness.
Source: Reprinted from Direct Marketing Guide magazine, January 2012.
How have you used your customer loyalty data to better target and reward your best customers?