Why Your Ecommerce Loyalty Program Needs a Data-Driven Overhaul

By Gerry Szatvanyi, CEO of OSF Digital

With the rate of U.S. inflation reaching 40-year highs, it’s no secret that consumers are feeling the ripple effects of pricing spikes for their essential products. From the grocery store to the gas pump, the reality of the situation is apparent – American household budgets are exceedingly constrained. Even as consumer price index (CPI) growth slowed sharply in the summer, economists still expect the inflation pressures to persist in the immediate future. How long? Only time will tell, but regardless, the margin for error across retail and consumer packaged goods (CPG) is tighter than ever before.

The rate of inflation coupled with supply chain shortages has hit brand loyalty the hardest. According to a report cited by the Wall Street Journal, nearly 70% of U.S. shoppers said they had purchased a new or different brand than they had pre-pandemic, while brands with low product availability or in-stock rates of between 72% and 85% have lost 0.7 percentage point of share of wallet on average.

In turn, retailers and CPG companies need to ensure that no stone is left unturned as they continue to weather the market volatility. The extensive volumes of data generated by ecommerce loyalty programs offer an opportunity to leverage digital transformation as a powerful tool for creating new pathways to profitability. Amid the uncertainty ahead, now is an optimal time to reassess brand loyalty strategies. With the right program in place, they can take proactive steps toward maximizing the impact of their ecommerce customer data for growth and sustained success.

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Actionable Data Insights for Personalized and Seamless Experiences

Loyalty programs are critical to customer retention and brand engagement. Our 2022 Omnichannel Retail Index reveals that 70% of retailers offer a loyalty program, but many of these programs are not fully optimized.  A recent Salesforce Connected Shopper Report found that 3 in 4 consumers are more likely to buy from a brand with a loyalty program, yet only 22% say they are satisfied with the level of personalization these programs offer. That disconnect can be alleviated by shifting away from one-size-fits-all approaches and static point programs in favor of unified, data-driven loyalty ecosystems.

Loyalty isn’t purely transactional; it’s about building a relationship with the customer. A multi-cloud ecosystem combined with AI-powered tools can enable companies to deliver exceptional loyalty programs at scale by personalizing interactions to create emotional connections with customers that drive repeat purchases. A cloud-based loyalty solution, for example, can be integrated with a multi-cloud solution, which fuses sales, service, marketing, CDP, and other commerce-related platforms.

With a unified loyalty ecosystem, companies can combine data insights from multiple sources to generate a 360-degree customer view – thus enabling them to create personalized, data-driven loyalty offers that go beyond general points and discounts. A multi-cloud ecosystem tracks a range of customer data, such as brand interactions, loyalty point accumulations, omnichannel conversions, purchasing patterns, service support, and more. With these key insights, marketing teams can send out the right offers for the right products at the right times.

The data-driven visibility provides a deeper and more holistic understanding of customers’ unique needs, in turn empowering organizations to deliver connected, relevant experiences across touchpoints for higher sales and retention rates. For example, service agents can access customer data on the loyalty program member profile to provide better and faster service. This shows customers that their needs are both heard and valued, forming an emotional connection that elevates the brand above its industry competitors.

Unified Loyalty Data Ecosystems for Customer Lifetime Value Growth

Adding an effective loyalty program to a multi-cloud ecosystem provides another data source to help companies generate a 360-degree view of customers. And with a CDP in that ecosystem, brands avoid silos by unifying customer data touchpoints across multiple platforms and channels — from marketing and service to in-store and physical sales. The heightened levels of internal alignment improve connectivity and visibility throughout the organization so that each department can apply data-driven insights to their specific functions and workflows in real-time.

It also helps build trust and commitment when loyalty program members feel like they are part of an exclusive community with unique treatment across touchpoints. Special member benefits such as early access to products, VIP service treatment, or other creative rewards or promotions will make customers feel unique and special, driving deeper relationships that lead to repeat purchases. These unique and meaningful experiences will also turn loyal customers into invaluable advocates who drive brand awareness.

The UK-based footwear retailer Schuh is a perfect example of an OSF Digital customer that reaped the benefits of an effective loyalty program driving customer lifetime value, retention, and engagement without disrupting its existing technology stack. Using a cloud-based Salesforce Loyalty Management solution, the company launched a successful customer-centric loyalty program that integrated within its existing commerce landscape and streamlined loyalty-related messaging.

A loyalty program won’t succeed as a singular, siloed, out-of-the-box solution. It must be integrated with a company’s commerce strategy and ecosystem to deliver personalized, experience-based rewards and perks. A multi-cloud approach with a CDP that can provide the data and insights needed will help companies get the most out of their loyalty program to increase ROI and customer lifetime value.

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Now is the Time to Adopt

With inflation levels and customer expectations at all-time highs, organizations should embrace digital adoption to support their loyalty program initiatives. Incorporating a loyalty strategy within a multi-cloud commerce solution is more critical than ever. The average U.S. consumer is switching brands at a rapid pace, highlighting the need for companies to prioritize maintaining loyalty at every touchpoint. Leveraging unified data for 360-degree customer views enriches programs with the right incentives that build lasting relationships and foster growth for years to come.


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