The Power of Analytics to Drive Loyalty – Part 3: Offers Looking for People, and People Looking for Offers

In our third segment looking at David Rosen’s webinar, The Power of Analytics to Drive Loyalty, we’re exploring Rosen’s, and Loyalty Lab’s, move away from some of the more traditional approaches to loyalty marketing initiatives.

“The right offer to the right person at the right time,” as Rosen puts it, was a great CRM buzz phrase, but we’re beyond it now. What we like to focus on now is a mutual approach, between merchant-driven and marketing-driven goals and initiatives.

Merchant-driven organizations use their loyalty programs to drive demand, and drive movement of a specific product or top-line revenue. Rosen refers to these types of initiatives as “offers looking for people.” When creating these programs, key considerations are:

• What specifically do we want to sell, do, or promote?
• Who is the best candidate to convert without sacrificing profitability?

Let’s say you want to sell more Greek yogurt, or frozen treats. You want to both a) find the people who have the greatest propensity to purchase these items and b) come up with an incentive offer directed at people who might not automatically purchase your focus item. So, a Greek yogurt purchase might allow a customer to earn more points, while buying three frozen treats can get you one free.

Ultimately, you want to eliminate gross margin bleed by not giving offers away to people when you don’t have to.

Marketer and marketing-focused organizations take a more consumer-centric view, which aspires to manage the lifecycle of your customers, both new and returning. You may likely have new customers – customers who have just had a baby, customers with large circles of friends with whom they interact online, and you want to figure out specifically what the right offers are for each one of them. Rosen refers to this differing approach as “people looking for offers.”

Our main considerations here are:

• What do we want to do when we want to change the behavior of specific members?
• What is the best offer to most effectively motivate that action?

In contrast to merchant-driven programs, here, we want to create a very explicit and customized new customer experience. A good, simple example that Rosen provides is wanting to wish your customers a happy birthday – how can we celebrate that, and make our customers feel good about it?

Generally, organizations tend to be one or the other — merchant or marketing-focused. The best strategy is to be both. At Loyalty Lab, we can help you find a detailed, analytic path to get you there, while providing you with the playbook to help you execute these strategies.

You Might Like:

• Webinar On-Demand: The Power of Analytics to Drive Loyalty
• Whitepaper: 2012 Trends in Loyalty Marketing