November 3, 2016

Data and Targeting: Loyalty Programs

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Loyalty programs are often a primary source of personalization data—among the 106 brands analyzed in L2’s recent Data & Targeting report, brands with loyalty programs collect 52 percent more data than brands without loyalty.

From 2015 to 2016, 28 brands announced new loyalty programs, as 16 brands shuttered their programs. Just 40 percent of analyzed brands currently offer a loyalty program, a confirmation that successful implementation of loyalty programs is difficult and costly.

Consumers expect a seamless loyalty program across channels, and best in class brands optimize their loyalty programs for a truly omnichannel experience.

Starbucks’ loyalty program is the gold standard. It boasts 12 million active members in the U.S. alone, and effectively leverages gathered data with highly personalized offers—the brand frames each rewards email as an “exclusive offer,” tailored to the consumer’s purchase behavior.

Starbucks uses rewards not only for in-store purchases, but for in-app purchases as well. The mobile app acts as the connective tissue, cataloguing rewards and creating a seamless in-store checkout experience. The investment has paid off—24 percent of all Starbucks transactions occur via their mobile app.

Integrating loyalty programs is more complicated for brands that rely on third-party retailers and lack control over the point of sale. These programs often require consumers to manually enter receipt information or upload receipt photos to a brand site or app to obtain loyalty credit.

Kellogg’s Family Rewards has streamlined the rewards process, allowing consumers to link multiple retailer loyalty cards with their Kellogg’s loyalty account. This solution takes the pressure off the consumer to remember and log recent purchases, making it easier to receive credit for online and in-store purchases at third party retailers.

Although loyalty programs aren’t the catch-all solution to the many challenges of providing a personalized experience, they can enhance data capture, personalization, and targeting capabilities when real value is delivered.

For more detailed insights on loyalty efforts, download our recently-published Intelligence Report on Data & Targeting.

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