3 Benefits of Location Data Driven Loyalty Marketing

23rd Jun 2017

Customer loyalty programs are nothing new. But the strategy behind them needs to be.

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Most loyalty programs are designed to primarily offer financial benefits to customers. But if you think of it, loyalty among customers is not created by price discounts. Customers who buy from you because of price will stop doing so if they can find a cheaper alternative elsewhere. You have to find a better way to retain existing customers. According to Gartner, 80% of a company’s future revenue will come from only 20% of its existing customers.

Let’s look at how location analytics can help you address these common challenges and create lasting loyalty:

  • Understand Your Customers Better

Suppose that we know from loyalty program data that a certain customer is 44 years old, female, married, in the $70,000 to $90,000 income bracket and frequently purchases luxury items. This is fine as far as it goes, but can you spot the missing puzzle pieces?

The problem is that loyalty programs are very good at telling us what a person is, but much less so when it comes to what he does or what he wants.

Ignoring behavioral data is likely to leave some serious lacunae in your understanding of a customer: does he head straight for the purchases he’s already planned to make, or does he wander through the shelves to see what else is on offer? Is he a discount shopper only or does he buy items that are not on sale as well? Is he a frequent shopper or a casual visitor?

The Wifi analytics platform deployed at your business venue can help you capture behavioral data and help you answer some really tough questions:

  • Which customers to focus on – Given the fact that most of your business comes from a small portion of your customers, you need to identify which of these customers are worth keeping.
  • Which segment of customers to let lag – It is very hard to market to all segments at the same time. Sometimes it may be in your best interest to prioritise a certain segment over the others. For example – the segment of customers who shop exclusively for discounts may not need to be focused on while running a promotional campaign for new arrivals. These ‘cherry pickers’ or ‘bargain hunters’ can take a backseat at that time.
  • Which customers to let go – To keep your numbers realistic and your campaigns effective, you need to keep updating your loyalty database. Customers which haven’t visited your store in over a year – maybe it’s time to let them go.

Segmenting your customer base only by headline data is a start, but it is in no way the road to serious competitive advantage. Any group of customers selected by traditional means will still show enormously diverse attitudes, preferences and habits amongst individuals. This means that any action taken to increase customer retention will likely fall flat in a large number of cases, if not based on data reflecting customer characteristics person by person.

  • Identify the Right Channel of Engagement

The value of timing in marketing is increasingly being recognized; receiving the same phone call while you’re bored, or when you’re in the shower, results in two very different experiences. The same applies to defining how location analytics should respond to the customer behavior it observes.

Customers can be targeted using a variety of channels such as SMS, in-app notification, emails or captive portals. But if you want to convert your existing customer base to a loyal group of customers, you also need to know which of these channels work best in attracting their attention.

Fortunately, another strength of a location analytics platform is its ability to analyze marketing campaign responses. A business owner can view how many sales transactions were made in each of his stores, how many offers were redeemed using email coupons, how many SMS discount coupons were used during in-store transactions and how many in-app notifications led to sales?

By analyzing all these data, it will become obvious to the business owner which channel of engagement is most effective for a particular type of marketing campaign. For example – it may turn out that when it comes to high ticket items, customers typically respond better to email campaigns, perhaps because it allows a large amount of information to be assessed while he’s making his mind up at home. Whereas low ticket items such as stationery and groceries are sold like hot cakes if you offer instant SMS discounts.

So, next time when a your WiFi analytics solution observes someone spending a significant amount of time near high-ticket, durable items, sending him an email would guarantee a better chance of engagement. If generating an impulse buy on a low ticket items from someone already in the store is the goal, in-app delivery of a discount code that expires in an hour is the indicated method.

Numerous channels are available, and using each in its most suitable mode can transform an occasional visitor into a loyal spender.

  • Real Time Personalization

The era of ‘spray and pray marketing’ is over because businesses the world over have realized that no product or service, regardless of how niche it is, will appeal to everyone. Messages that are not relevant to customers will simply fly past them. On the other hand, personalization can result in 29% higher open rates and 41% higher click through rates. This is a major reason why companies are focusing on personalizing experiences to drive customer loyalty.

There are many ways in which a WiFi location analytics platform can help you personalize your communication and establish a basis for trust and partnership.

  • Putting a name to a face – If a certain customer logs into your captive portal using her Facebook credentials, you’ll instantly know her name. If you then send her a welcome message saying – ‘Welcome to our store, Ms. Rachel’ instead of ‘Welcome, Dear Loyal Member’, the customer will instantly warm up to such a gesture and will be psychologically motivated to make a sale.
  • Special Treatment to Loyal Members – ‘Everybody is equal’ but only in the eyes of law. When it comes to marketing, no two customers are more different. Loyal customers typically seek preferential treatment and location analytics platform enables you to do that. Once you know a certain visitor is a loyalty member, you can personalize his/her communication based on his previous purchase/behaviors.

While real-time personalization is the way to engage customers, one must remember that upwards of 80% of users will opt out of marketing initiatives if they are subjected to excessive volumes of random marketing.

Those who receive offers and discounts more closely aligned to their needs and interests, however, tend to begin viewing these personalized messages less as advertising and more as practical suggestions, meaning that they will be that much more likely to stick with their favorite brand for longer. This kind of active engagement is priceless: instead of choosing a certain retailer by default or habit, engaged customers will go out of their way to make purchases that offer them value.

Location Analytics: A Force Multiplier

Web, social, mobile: each new technological wave that marketers need to understand and harness seems to follow right on the heels of the previous one. The next big thing, certainly in retail, seems to be location analytics. Location analytics is not just a useful technology on its own, it’s real value is as a force multiplier for things like loyalty programs and mobile advertising.


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