The ROI of Loyalty
According to Brand Keys, just a 7% increase in loyalty can boost lifetime profits by 85% per customer. Here’s how to make it happen.
In a time when customers are jumping ship faster than ever before, a great loyalty program can do a lot to keep them on board — and inspire new people to join you. A recent Connected Shopper Report found that 78% of consumers are more likely to buy from a brand with a loyalty program. However, only 22% say they are satisfied with the level of personalization offered to them by these programs.
Logan Patterson is a director in Slalom’s Global Business Advisory Services team, leading Slalom’s capabilities in marketing technology, analytics, and transformation, media and agency services, and product strategy. He believes it’s not only imperative to be aware of these statistics, but to reach to them when making your own business decisions for the best possible outcome, particularly when it comes to customer loyalty, retention, and positive customer experience feedback.
Investing in loyalty programs can have a direct impact on revenue. Brand Keys found that just a seven percent increase in loyalty is all it takes to boost lifetime profits by 85% per customer. And according to a recent Salesforce report, companies see a 25% higher average order value when customers receive personalized recommendations. Bottom line: there’s a huge opportunity here for companies that do it right.
At Slalom, we believe personalization is the key to your success for loyalty programs. If you treat your best friends like casual acquaintances, you won’t be very popular. The same is true with customers. Getting the same offer as everyone else or just earning points after you’ve purchased several times from the company is not as compelling as an experience tailored to your shopping history, preferences, customer journey, and value you represent as a lifetime customer. This kind of personalization and attention to detail for each customer that represents them as an individual is exactly what builds brand trust and loyalty.
Why do some companies fail when it comes to loyalty?
Businesses need to take the behavioral data they’re gathering from loyalty programs and combine it with other information they have about their customers to deliver personalization at scale. The problem is that the data needed is often siloed in different departments running on different systems, including ecommerce shopping carts, customer service teams, inventory management, and post-sale support.
This data can be difficult and time-consuming to unify. For example, it can create long delays when siloed departments need to find a way to get marketing data on customer demographics to meet information about their past sales or opinions they’ve shared with service agents. Or a company might offer a simple point and discount program at a time when their customers prefer personalized, experience-based rewards.
So, what’s the solution?
At Slalom, we’ve found that Salesforce helps businesses deploy effective loyalty programs quickly by doing two things:
- Bringing together data from across the organization into a single source of truth that any team can access.
- Providing tools that let teams use that data to personalize loyalty interactions with customers across their journey.
One example: We sided with OnSide
OnSide is a charity that provides young people in economically disadvantaged areas across England with positive adult role models and safe spaces. It gives young people somewhere to go, something to do, and someone to talk to. Youth workers partner with Youth Zone members to help them see what they could achieve and to build the skills and confidence that allow them to pursue their dreams.
OnSide’s team was looking to evolve their existing Salesforce solution in ways that would help them better support young people and demonstrate the impact of their work. A global team of our consultants at Slalom from Manchester, London, Boston, Atlanta, and Seattle partnered with the organization to develop and deliver the following features:
- Safeguarding has been incorporated into the solution, eliminating offline paper forms.
- Online evaluations enable workers to track young people’s journeys and measure their progress.
- New dashboards and reports provide valuable insights on deprivation and help teams identify where to reach out.
- Donations across OnSide and the Youth Zone network can now be managed via a standard online process.
Now, OnSide has access to tools that help them tailor their offerings and tell compelling stories about the value and impact of their work. And young people who rely on the Youth Zones remain on the path to loving their futures.
“For the first time we are really going to be able to start to understand the impact that universal youth work has on young people.” — Jamie Masraff, Director of Operations, OnSide
Because an effective loyalty program is a “must-have” for more companies than ever before, Salesforce has released a new Loyalty Management solution. It makes the process of setting up a program even easier, faster, and more cost-effective than ever before. It’s an end-to-end solution that empowers businesses to create intelligent, differentiated experiences that grow relationships and increase customer lifetime value.
Logan continues explaining loyalty programs in a way that makes it easier to comprehend. We see Salesforce as a particularly effective solution for companies in highly competitive marketplaces, where loyalty programs are a big factor in why people choose one brand over another.
Ironically, “loyalty management” is a very subjective term. But what we’re trying to do is make our consumers emotionally invested in our brand, and we do that by not seeing our customers as clients, but as human beings with individual wants and desires.
By giving companies a way to be nimble and assure their rewards are always relevant to customers, we believe, and have already seen, customer retention rates and percentages increase even more than it did pre-pandemic.
There is no “one size fits all” loyalty solution
A recent Salesforce study found that 53% of customers say they feel an emotional connection with the brands they buy from the most. Loyalty programs can play a key part in building this connection — but only if they show an understanding of who each individual customer is and what stage they’re at in their journey.
While points-based rewards might be appealing at first, brands must find ways to strengthen connections throughout the entire customer experience. This can range from giving extra incentives for repeat purchases to offering access to exclusive events.
Salesforce Loyalty Management comes equipped with an integrated technology stack, including Marketing Cloud and Salesforce CDP, as well as the ability to connect to your existing systems, creating personalized offers and unique experiences throughout the customer journey. Built on the trusted Salesforce platform, Loyalty Management gives businesses the underlying infrastructure to build their programs along with the flexibility to fully configure the program to fit their specific needs, decreasing their time to value.
The mechanisms of a great program already exist within Loyalty Management. Point accrual and redemption rules, offers, and member management simply need to be configured to your needs. This allows for a faster time to market and saves on development costs of building a loyalty program from scratch.
At Slalom, we’re seeing a number of ways the Salesforce Loyalty Management solution can benefit all the industries we work with, and we’re fortunate enough to work with all industries, across both B2B and B2C:
- Retail — Creating lasting loyalty by meeting customers where they are with personalized rewards, they can redeem online or in-store.
- Consumer goods — Elevating the consumer experience, driving consistency in demand patterns, and raising awareness and adoption of select products.
- Media and communications — Increasing loyalty in a fragmented market by offering more relevant content based on a unified view of every subscriber.
- Travel & Hospitality — Building trust and transparency with travelers by expanding program benefits and connecting loyalty to their entire travel experience.
- Manufacturing — Incentivizing partners across their lifecycle, delivering immediate, and long-term rewards, and increase-sharing product lines carried.
The role of loyalty programs in B2B
When people think of great customer loyalty incentives, B2C brands usually come to mind. But these kinds of programs are equally important for B2B companies. Loyalty Management enables a business to make the shift from product-centric to customer-centric, helping to better engage partner channels and corporate customers with incentives that improve partner performance and help drive the bottom line.
Loyalty and addressability
The eventual loss of cookies and other third-party identifiers means that companies will need to rely more heavily on first-party customer data to execute personalized marketing campaigns. With privacy being a big concern right now, people are only willing to give up their information if they feel like it’s going to be used to give them a better experience.
Salesforce Loyalty Management enables companies to go far beyond simple “earn and burn” programs and offer customers real value. Companies and their customers also get the reassurance that Salesforce takes data security very seriously — it’s their number one value. They utilize some of the most advanced technology for Internet security available today. And you’ll always be 100% in control of all your data.
What’s next?
In the future, we believe more and more companies will be elevating their loyalty programs to stay competitive. Tiered offers, access to special events, and personalized product offerings will become commonplace, and that’s a huge part of our strategies for nearly all of our clients moving forward into 2022. Now is the time to focus on loyalty programs. With Salesforce, you’ll be able to put your ideas into action faster and more cost-effectively than ever before.
Slalom is a global consulting firm that helps people and organizations dream bigger, move faster, and build better tomorrows for all. Learn more and reach out today.
