Why Personalization is Key to Customer Loyalty: 3 Steps to Foster Both

Today, it’s widely known that it’s more profitable to retain an existing customer than to acquire a new one. And many business owners are aware that personalisation plays a major role in customer retention. So while you may not know that an average repeat shopper spends an estimated 67% more than a new one, you likely know that’s it’s critical to create a personalized customer experience to keep them coming back.

But in this competitive business environment, building customer loyalty is easier said than done. Every time your business acquires a new customer, it gets a little more difficult to personalize their experience. Fortunately, the technologies that enable the online giants to know each customer and make their experience feel tailor-made are available to brick and mortar businesses too. By using these technologies in the right ways, you can create personalized customer experiences in a scalable way.

To help you do just that, here are three steps to making personalization a profitable reality at your business:

1.  Get to know your customers

Before you can create a personalized experience, you have to get to know the customer. To streamline this process you need to have a database that keeps track of key details about specific customers.

By creating a loyalty program for your customers to sign up to, you can build this sort of database, while giving customers a strong incentive to join—especially if you offer them an enticing welcome gift. At the same time, you’ll want to create a registration form that each new loyalty program member will fill out, giving you the basic details you need to create customer profiles in your database.

For the data collection to be complete and automatic you need to use a loyalty platform that is totally integrated with your POS to automatically gather transactional information each time a customer makes a purchase.

2.  Divide your customers into groups

Even with a strong body of customer information, most successful businesses can’t take the time to craft individual messages for specific customers on a large scale. Instead, you’ll want to divide your loyalty program members into groups based on essential criteria—giving you the building blocks for targeted marketing.

One way you’ll likely want to group your loyalty program members is based on their tier. The idea here is simple: The more a customer shops at your business, the higher their tier.

You can also group customers according to more advanced segmentations. For example, coffee shops could segment customers according to drink preferences such as tea or coffee lovers. Or, a restaurant could segment customers as vegans, vegetarians, or meat eaters. Depending on your business model and clientele, you may want to segment members based on their age, lifestyle details (such as families or students), preferred location, favorite type of product to buy, and/or other aspects of their shopping habits.

While these segmentations are complex, creating them does not have to be. Some customer engagement platforms will automatically build segments for you, according to your business goals or customer behavior.

3.  Send them personalized campaigns

Once you have gathered information about your loyalty program members and divided them into groups, you’ll be ready to communicate with them in a personalized yet scalable way. The key here is to use automated tools for targeted marketing.

Before running campaigns, take a step back and review your overarching business goals.

For example, if your goal is to bring back lapsed customers, go through your database and tag customers who haven’t visited in a while. Send them a targeted push notification with an enticing and personalized benefit to redeem in-store to bring them back. Define your goals and then you’ll be able to set the right campaigns to track and achieve them.

You should make the most of every opportunity to personalize the customer experience—not only through digital messages but also in person. For example, with a customer engagement solution integrated with your POS, cashiers have all the customer details at hand to create a personalized checkout experience and upsell the offers that are most relevant to the customer. Face-to-face interaction based on data gives you the capabilities of the online giants but with the added competitive advantage of your personal and human touch.

Want the tools to send advanced and personalized rewards? Watch a demo!

Posted by Liran Mayost

Liran heads Como’s Product and R&D divisions, responsible for developing the product strategy and roadmap, and overseeing all aspects of research, development, business intelligence, and innovation.