The Power of Analytics to Drive Loyalty – Part 1: Desires vs. Capabilities in Analytics
TIBCO’s David Rosen recently presented at the Loyalty 360 Engagement Expo on a topic that we at Loyalty Lab find to be undeniably essential in today’s loyalty marketing landscape: the importance of analytics, and the ways in which more comprehensive reporting can grow the success of your loyalty program.
We surveyed over 100 marketers to assess what analytics tools they are currently using; the types of metrics, or dashboards they have; and the capabilities they’re investing in to take their loyalty programs to the next level.
Ultimately, we found that there is a huge gap between the desire to be able to do more complex modeling — from a day-to-day analytics approach to the ability to analyze the success of a specific campaign on a per-customer basis — and the internal capabilities of various marketing organizations.
The survey was broken into three segments. In the first segment, in which we measured the success of loyalty programs, the biggest gap was seen in measuring specific campaigns using rigorous test and control. This refers to the ability to analyze any campaign down to the individual ROI by comparing a group that was subject to the campaign versus a control group of consumers, stores or products that did not participate in the campaign.
The other major gap in measuring success was using tools to measure social buzz and sentiment. This area is obviously ripe for investment over the next few years. Currently, about 40% of marketers are using test and learn from a scientific standpoint to analyze loyalty programs, but 80% of marketers think that everyone should be doing so.
The second segment of the survey measured the gap between the importance and efficacy of dashboards and reporting. Here, the most noticeable gap was in segment migration, or the ability to move profitable customers to higher tiers, as well as retain customers already in high tiers.
The final part of the survey measured the interest in and need for specific data analysis and analytics capabilities. Rosen cites a number of advanced analytics that can be beneficial, but one approach stood out to all of the marketers surveyed as an enormous boon for a loyalty programs: the ability to match members to specific offers, and to optimize these individual offers. As Rosen put it, “Marketers dream to be able to achieve this kind of relevance for the customer.”
In our next post, we will review the three types of segmentation models Rosen suggests deploying to optimize your loyalty program. Hear more from him and see “The Power of Analytics to Drive Loyalty” webinar in its entirety here.
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