THE CLARUS Blog

How to Use Personalization to Increase Customer Loyalty

Everyone wants to be recognized. 

Consumers want to be loyal to brands that recognize and know them. It’s about being part of a brand community that is exclusive and engaging. 

When an email is not personalized, 52% of consumers will look elsewhere. And 72% of consumers will only engage with personalized messaging. 

Also, 90% of consumers are happy to share their data with brands to receive exclusive discounts on products they’re interested in. 

Personalization can have a major impact on both brands and consumers. Personalized communications that are relevant can create lasting customer loyalty and drive revenue growth of 10%-30%. 

Let’s see what ways your brand can use personalization to enhance your customer loyalty. 

 

Profile Your Customers

This is the best way to truly know your customers and their interests. 

Collect personal profiles and this data will become invaluable. Especially since third-party cookie data will disappear in 2023, brands are eager to gather first-party data to gain useful customer insights. 

First-party data is information brands collect from online and offline sources like a website, app, CRM, social media, or surveys. 

Make the process enticing for consumers to submit profile information. This will go a long way toward brands personalizing experiences. 

Customer profiles list things like interests, purchase behavior, and demographic characteristics. Brands can use customer profiles to craft targeted marketing campaigns to help increase loyalty. 

And these profiles give brands a better overall picture of their ideal customers. As a result, you can send them targeted content to strengthen the two-way relationships. 

Having first-party data helps brands divide customers into specific groups, which helps sending personalized, targeted messages. 

Sephora’s Beauty Insider has long been recognized as one of the best loyalty programs because of its various experiential benefits.  

Sephora does a great job of engaging members and keeping the program fresh and exciting.  

When loyalty program members have their makeup done in stores, they receive a log-in for the app so that the makeup artist can record each product he or she used in the customer’s personal profile.  

The app allows members to virtually try on products and to receive recommendations based on their personal beauty traits. Any communication a Beauty Insider member receives clearly shows his or her total of loyalty points.  

Sales associates have access to all customer profiles that include data on in-store purchases, online browsing and purchasing patterns, and in-store interactions. 

 

Create Experiences Based on Data Insights

Consumers want brands to know them and their preferences. Given the available technology, consumers expect personalized, highly tailored experiences based on personal data they give to brands.  

Effective personalization translates to elevated loyalty. Consider 80% of consumers are more likely to buy from a company that provides a tailored experience.   

Create personalized messaging based on past customer experiences. Effectively leveraging personalization and customer data are two big components of brand loyalty today.   

Starbucks restructured its Starbucks Rewards loyalty program in April 2019 that now includes tiers. 

The revamped program lets members use points to buy packaged coffee and select merchandise for the first time. Also, Starbucks credit and debit card holders can accrue points forever with no expiration date. 

Starbucks Rewards eliminated the elite “Gold” status that customers achieved after spending $150 or earning 300 points. Members can start redeeming Stars (program currency) immediately after they are earned. 

Members can earn a reward for as little as 25 Stars (extra espresso shot, dairy substitute, or additional flavor).  

Other perks include a free birthday reward, the ability to order ahead, free in-store refills, access to member events, and the ability to pay via the app. No longer do members have to load gift cards to use the app.  

And all these changes were made after significant customer research. 

Company officials also have loyalty program members more payment options based on customer insights. Instead of having to use pre-loaded gift cards for payment, Starbucks Rewards members now can use cash, credit or debit cards, or PayPal accounts to pay within the app. 

 

Observe Their Behavior Over Time and Adjust Your Interactions Accordingly

This is crucial because personalization needs to be analyzed and optimized over time to retain loyalty program members. 

Customer service has always been considered a differentiator way before the abundance of consumer data was available. Now, offering a personalized customer experience is the differentiating factor. 

Optimization is a continuous cycle that brands should always use, especially when it comes to personalization. You want to know what targeted messaging is relevant and practical for your customers. 

Being agile and adapting to the needs of your customers makes it easier to keep track of your personalization goals. 

When you optimize your customer experience it shows members that you care about them and what you’re offering is relevant, fresh, and full of value. This is the key to the long-term success of your loyalty program and your personalization goals. 

Brands have large amounts of customer data available and more opportunity than ever to personalize experiences to create loyal customers. 

Target officials worked directly with customers to develop the Target Circle loyalty program in 2019. Target Circle benefits include members earning points on every trip and having the opportunity to help the company make a positive impact in local communities. 

A key aspect of the Target Circle program is it lets members get involved on the philanthropic side of their respective local communities. 

Program benefits also include personalized deals and perks, including a birthday surprise, and getting early access to special sales throughout the year. 

 

Personalization is Becoming a Way of Life for Many Brands

Think about collecting personal profile information on your customers, crafting personalized experiences around them, and creating solid long-term relationships that foster brand loyalty. 

Just look at Walgreens. 

Alyssa Raine, Group Vice President of Customer Marketing Platforms, Walgreens, talked to Clarus Commerce earlier this year about her company’s focus on personalization. 

“We are always listening to customers and we can now measure and maximize our results at a level that didn’t even exist five years ago,” Alyssa explained. “We have gone from relying primarily on brand positioning and mass channels to expanding into digital, mobile, SMS, social media, influencer partnerships, content, etc. and creating highly personalized, tailored experiences and marketing messages.” 

Alyssa said Walgreens’ mass personalization strategy “helps us coordinate exceptional experiences for our customers across owned and paid channels.” 

It’s all about the two-way conversation between a consumer and a brand. The more you can personalize that, the more loyal your customers will be. 

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