Using advanced segmentation and lifecycle management models, loyalty programs can play a significant part in the entire data value chain by allowing the gathering of member personal data, analyzing the data on loyalty platforms, and employing the insights gained to encourage deeper member engagement. This enables managers of loyalty programs to find out when, why, and how members interact with the program with the help of loyalty analytics platforms.

Compared to their predecessors, loyalty program owners today are incredibly fortunate. Over the past three decades, loyalty program management has shifted from simply running a loyalty program to companies wanting to harness the “invisible” power of such programs through the insights they provide into the behavior of their customers, the ability to create better relationships & informed decision-making for targeted marketing campaigns. Today, the focus has shifted again to the design & management of high-value customers through segmentation and quality customer experience across various channels & touch points.

Businesses can access customer data insights in a variety of ways. With the technology available today, brands can easily access real-time reporting dashboards & segment insights using a loyalty program software. This is especially useful for smaller DTC brands, who don’t have to call in fancy analysts & data scientists to analyze their data.

In a rapidly changing world, ecommerce brands shift their strategies in an effort to always stay on top. And as competition grows by the day, brands face an ongoing challenge of keeping customers coming back on top of acquiring new users.

The DTC (direct to consumer) model allows brands to have a better relationship with their customers by allowing them to purchase products directly from the brand. It ensures better overall quality by shifting the weight of customer satisfaction and experience through owning and controlling the value-chain. Consequently, the DTC model implies that brands have an opportunity to foster closer bonds with their customers by offering better quality products, faster shipping delays and wider delivery options, more convenient payment methods, a well thought out return policy and excellent customer service. This model has gotten more and more popular that major brands such as Nike and L’Oréal are shifting significantly towards it. Disruptors like the Dollar shave club explode into the market putting small brands into more competition with companies that can afford to spend big in marketing and PR budgets and customer experience.

Although the DTC ecommerce models are full of opportunities, large brands who have the resources to build a fast and frictionless buying experience run the risk of overshadowing smaller ecommerce brands who seem to never catch a break and find themselves constantly looking to get customers attention. With potential buyers being online and on social media, the moment they come up with a great strategy to make customers happy, the rest of the industry follows. As a result, ensuring customer loyalty and satisfaction is a key focus for many, as most are aware that a happy customer will share and talk about that brand with their friends and family. These brands are looking for “super consumers” that buy more, spend more, and return less items, all the perfect metrics.

Many brands invest heavily in their overall customer experience to help their customers achieve this feeling. Why? Because customer satisfaction is the predecessor to customer engagement. The impact of customer satisfaction and engagement on value creation and customer loyalty is more actively recognized by many experts.

Today, more and more companies strive to foster positive relationships with their customers to unlock their satisfaction and loyalty. But, satisfaction alone isn't enough to secure loyalty. Customer relationship management has shifted its focus on engagement, trust, and dedication. In these new times, the key to effective customer management lies in satisfaction and emotional connections. One study showed that fully engaged customers bring 37 percent more annual revenue to their primary bank than actively disengaged customers.

In the customer-centric and highly-competitive eCommerce space, customer engagement is a critical success factor, and interaction of a brand and a customer is becoming a key element in the process of value creation for both parties. Customers that are actively engaged with the business are more likely to stay longer, spend more, and recommend you to others. Engagement is also one of the most important components that can help eCommerce businesses capitalize on customer loyalty.

Customer loyalty programs have begun to appear in a wide range of sectors in an attempt to develop customer relationships based on rewarding return customers. The advantages for a business to retain consumers are well known, and they include the lower costs of customer acquisition, long-standing customers who are more likely to be less price-sensitive which creates opportunities for receiving higher margins, and customers who buy a lot of products and services are more inclined to respond to marketing messages and other targeted offers.

At its most basic form, loyalty programs reward customers for each dollar spent and/or frequency of purchase. Until recently, most frequent flyer programs rewarded customers based on the distance traveled and not on the revenue generated by the customer. As a result, a customer x could get a cheap ticket at a fraction of the price from an affiliated website, at the same value as a customer y who would have paid the full ticket price. This inconsistency had a significant influence on the financial performances of airlines like Delta and American Airlines that almost turned their loyalty program into a failure. But to design, build & sustain profitable customer loyalty, airlines were pushed to revisit their frequent flyer programs' structure to align their loyalty programs based on profitability rather than distance. This trend was also seen in other industries where marketers are focusing their loyalty programs on customer spending (e.g. credit card companies, grocery stores, and departmental stores, etc). You can always use a customer loyalty analytics solution to measure retention and engagement.

A loyalty program is supposed to be the cure for the ailment that plagues many businesses: customer churn. By giving out incentives and rewards to your customers, you increase purchase frequency and average order value per customer. According to a study by Markinblog, the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is only 5% to 20%.

The loyalty programs statistics sounds great, right? yes, but the truth extends further than that. Your loyalty program is underperforming and becoming a financial burden.

Before you lay the blame on marketing over-hype campaigns of loyalty systems or how the loyalty gods are dooming you for eternity, there's a good chance it's your fault.

If you're looking for ways to improve the return of investment of your loyalty program, then you're in the right place. We will take a deep dive into what may be preventing you from reaping the benefits of your loyalty program, and how to fix it before it's too late.