The Importance of Customer Loyalty and Personalization

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Brian Ross
graphic of digital people pushing shopping carts between web pages

How leading retailers are setting the bar high for true personalization in customer loyalty and engagement.

Personalization: It’s the new industry buzzword, touted as the solution for a host of branding, marketing and, recently, even merchandising problems. But it seems to mean different things to different people, and as hard as it is to define, it’s even more challenging to execute. But with challenge comes opportunity.

By looking to some of today’s leading retailers, we can see that delivering truly targeted communications can be the key to sustaining and growing a loyal customer base.

We know that customers want personalization; 69% of consumers say they prefer to receive personalized communications based on their shopping history. This demand for personalization grew 11% from 2015 to 2016. Yet despite growing promises of relevance by technology vendors, consumers say many companies are still missing the mark.

In today’s world of digital communication, it’s very easy to send blanket emails to an entire database of customers for virtually nothing.

In the 2015 Precima Customer Centricity survey, 50% of respondents said they didn’t feel they were benefitting from the collection of their personal data. Many said they were seeing no personalization at all and were frustrated by retailers’ generic communications. As customer expectations of personalization increase, the bar for what constitutes true customer focus continues to rise.

Consumers have higher expectations of us. Several leading retailers are doing a great job of meeting those expectations, which creates a great opportunity for others to learn and follow suit.

A program for a large grocery retailer, for example, is the first digital-only program that rewards customers the more it knows them. All offers are targeted and personal. Rewards improve as the customer’s data gets richer, and the better the customer, the better the rewards. That’s personalization – and the new future of loyalty.

Another great example is the new shopping technology used by Amazon Go (currently in testing at a beta store in Seattle; Amazon plans to launch it to the public in 2017). Amazon Go is a checkout-free shopping experience that alleviates a major customer pain point: waiting in line. The Just Walk Out technology allows a customer to pick items and then just leave the store; the order is automatically processed electronically and charged to the customer’s Amazon account. The system tracks when an item is taken off a shelf, which ideally allows it to send personalized upsell or cross-sell offers to a specific customer right on the spot. If this works as the company envisions, it will enable Amazon to offer a whole new level of personalization. Companies and consumers alike have a clear interest in effective personalization, and there are some incredible new innovations in analytics and other tools that can help companies get there. With a willingness to invest the time and money required to do it right, today’s organizations can use personalization to build strong, loyal customer relationships. The data shows that customers want this. Since most customers report that personalization increases their trust in and loyalty to a brand, it’s a clear win for retailers, too.

About the Author

Black and white photo of Brian Ross

Brian Ross

President

President of Precima, a NielsenIQ Company. Brian works with some of the world’s leading brands to deliver world-class customer-centric solutions through strategic consulting, industry-leading analytics and a next-generation technology platform. His vision and leadership helped launch Precima in 2008 as a three-person startup, and he has since grown it into a global leader in retail, B2B and CPG strategy and analytics with over 300 experts in Canada, the United States and Europe. With an extensive background in loyalty solutions, customer marketing and merchandising strategies, Brian oversees the strategic and operational management responsibilities, as well as relationships with customers and business partners.

Before Precima, Brian spent several years in management positions across LoyaltyOne businesses, notably providing client management and analytics support for key partners of the AIR MILES Reward Program. He used data-driven customer insights to develop successful programs for clients in grocery, pharmacy, department store, specialty retailing, financial services and consumer packaged goods. Brian shares his broad range of expertise and thought leadership in regular features in leading marketing publications, and is a frequent speaker at industry events and forums.