Why Is Tracking Customer Activity Key to Success in Building Loyalty?

Posted by Brent Harms on Fri, Jul 19, 2013 @ 01:08 PM

Tracking – it is big news today.  A few weeks ago we were told that the government was tracking our phone calls and emails.  Just this week we learned that our car license plates are being tracked.  With all this publicity on the bad side of tracking just the word can cause people to panic.  But there is a good side to tracking, when consumers can benefit from it.

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First, what does  tracking in a loyalty sense mean?   In a nutshell, you have access to and record what each of your customers buy and when.   Sounds simple, but a lot harder to pull off, and equally difficult to actually use the data you collect.

Second, why do you care about knowing this level of detail?    A few major reasons are to provide offers that your customers will want which will drive them back to your business, upsell more of your products  or to know if you have lost a customer.    An example is a typical salon may see that they are effectively capturing a customer’s hair styling needs, but that customer is not buying any of their products.   You can offer them a “deal” on trying a product that fits their needs.  This offer is a benefit for the customer and demonstrates your appreciation.   Or a restaurant that a specific customer has frequented every week for the last year, but suddenly that customer doesn’t show up for a month.   For them, you can offer a special deal to come in and dine with you in the next week as a “missed you” offer.  

Third, how do you get this important data about your customers?    In some businesses like an airline or an auto sales business, they have to know who you are for regulatory and legal purposes.   This alone gives them the ability to track your purchases.    For many businesses, such as a restaurant, the consumer has to give you permission to track purchases.  There are many consumers whodon’t want you to know who they are and what they are buying.   In comes loyalty marketing.    If you can offer your customers a great program that provides attractive rewards and benefits, plus is easy to use, you have the tool to get your customers permission to track their activity.   Now you can start to see the benefits of a loyalty program by increasing the average spend of those customers and reducing the number of lost customers.

I am amazed by the large number of businesses that know who you are and what you are buying, but don’t really use the data.   A great example is banks.   They are notorious for not upselling additional products to their customers.    Also, I am in many loyalty programs (as you may guess) and am constantly surprised by the limited promotional offers  I receive from them that use the data they have about my purchases with them.   Usually, the only promotional offers I receive from the loyalty program are standard promotions sent to all of their loyalty members.  The reality of 1-1 marketing is that you need the time and the data.  That is the beauty of loyalty programs, you can start simply getting information and as your base grows and the data grows, you can begin to enhance your marketing with specific offers that your customers will appreciate.   

So, the key message, if you spend the time and resources to get to the enviable place of knowing who each of your customers are and what they purchase, don’t stop there.    Invest an equal amount of effort into using this data at a very granular level to connect with each customer to increase their loyalty and business with you.

Brent Harms

Tags: Loyalty Marketing, Customer Experience