Loyalty and CRM: Better Together
Loyalty programs are just one element driving overall customer loyalty. Well-executed customer relationship management (CRM) strategies deepen the bond with customers and members through personalized, cross-channel brand experiences.
The inherent synergy between loyalty programs and CRM presents opportunities for efficient use of shared resources and stronger outcomes for both. Unfortunately, brands that treat them as separate initiatives lose out on the value of finding alignments in business structure and strategy that allow savvy brands to maximize outcomes for both.
Let’s explore some of the ways your brand can align loyalty and CRM.
Break down the barriers
Siloed team structures prevent many brands from aligning their loyalty and CRM functions. According to Forrester:
68% of business and IT decision-makers directly involved in CRM implementation in the past 12 months report they struggle to get a single view of the customer
48% struggle with creating customer insights to drive decision-making
29% struggle with gaining cooperation across the organization to support CRM improvement projects
Coordinating CRM efforts and loyalty programs can help remove compartmentalization and facilitate sharing campaign data and insights across teams. To best leverage potential efficiencies, brands should engage cross-functional teams throughout the campaign setup, implementation, and review processes.
It’s important to ensure everyone in the organization understands the multilayered value of marketing messages—both for driving loyalty and deepening customer relationships and experiences more broadly.
Personalization is central to today’s customer experience, and it’s a key driver for developing long-lasting customer loyalty. According to a Lacek Group research study, 62% of respondents say personalized communication and experiences are no longer nice-to-have, they’re a must-have. Leveraging resources between loyalty and CRM is one way to meet consumers’ increasing expectations for personalization.
Chick-fil-A enables store operators to send targeted local offers directly to members of their Chick-fil-A One® loyalty program. Members are notified via the app, with push notifications, and through email when a personalized offer is available. Personalized emails come from the local store operator and even include their image, deepening the connection each member has with their local store and the brand.
Fashion and home retailer, Urban Outfitters, cross-promotes their UO Rewards program offers in brand sales promotion emails like this one for their recent spring sale.
Create cohesive messaging
Cohesive messaging that reaches consumers across multiple channels drives meaningful engagement. In fact, combining in-product channels like in-app messaging along with out-of-product channels like email can result in a 55% increase in 90-day retention rates and 3.2 times average increase in purchases per use for each additional messaging channel.
When initiatives are aligned, CRM strategies can recognize whether or not someone is a loyalty program member. That data can be used to incentivize nonmembers to join, and to encourage current members to engage with the brand on new channels. For example, email subscribers who are loyalty program members could be encouraged to opt in to push notification or download the app. Consistent messaging delivered across multiple channels deepens the relationship between the brand and the customer.
Find opportunities with more data
According to Forrester, nearly 90% of U.S. online adults belong to a loyalty program, yet only 46% of loyalty program members agree that it makes them feel more connected to the brand. Aligning CRM and loyalty programs increases the amount of actionable data available to both practices.
When used wisely, that data results in highly effective and personalized marketing communications. Leveraging CRM strategies can help brands ensure loyalty members receive the communication they want via the channels they are most primed to engage with.
Spotify Wrapped—the music streaming service’s year-end message to subscribers recapping their listening habits and favorites—is an example of using customer data to create a highly personalized and relevant experience. Delivered as a personalized teaser email, the CTA links to the app or the Spotify Web Player, depending on the device the recipient uses to open the email. For subscribers who want to further engage, Spotify also provides a full in-app experience that is easily shared to social media.
Brands need to be smart about how they use data, however, or they risk alienating customers. Brands must avoid using data in ways that feel intrusive to customers or that don’t provide customer value. Brands should also carefully consider the channels and frequency of messaging to avoid inundating customers.
For example, a brand with a loyalty program and a separate email club, should ensure members of each receive only the communication that is most relevant to them and only the content that provides value to that particular customer.
Aligning loyalty program and CRM initiatives—and then applying the learning generated from collaboration between them—creates an array of efficiencies and benefits that brands can use to improve their customers’ experience and build loyalty. It takes effort and planning, but it can pay off in increase of relevant data and optimization potential.
Brenna Hodge is senior manager, Strategic Services for The Lacek Group, a Minneapolis-based data-driven loyalty, experience, and customer engagement agency that has been delivering personalization at scale for its world-class clients for more 30 years years. The Lacek Group is an Ogilvy company.