How well do you know the customer?

Every successful business connects with customers by using purchase history data. How well you maintain and use your customer insight can make an enormous difference on the quality of customer service provided.

How to connect with your customers
If you are going to be using customer database to help foster loyalty and promotions, it needs to be managed well. Maintaining current and relevant purchase history is one step. Integrating the information into promotions and customer service is the heart of the process.

The best way to understand how to effectively leverage customer information in your organization is to look at an example. FreshDirect has incredible success using customer information database to promote loyalty and engage customers with amazing service. Highlighted in a Business Week’s Interactive Case Study, FreshDirect attributes much of its success to using customer purchase history in everyday operations. (You can read the amazing numbers in sales growth FreshDirect has achieved in the BusinessWeek article.)

How the System Works
The way FreshDirect uses their customer data seems very basic but it is incredible effective. Much like other online retailers, customers create an account. Once the customer has a sufficient history of purchasing certain products or brands, FreshDirect then utilizes the data to offer virtual service. As an example, say a customer has a history of purchasing a cleaner but for this visit does not add it to the shopping cart. FreshDirect prompts the customer at checkout to ensure they didn’t forget the item. The virtual shopping list reminder is a great opportunity to provide personalized service.

The process and use of a customer database seems extremely logically. If you start to brainstorm outside the box, one can imagine the numerous customer service possibilities.. Think of a customer who is brand loyal to Heinz ketchup. Considering the Heinz company is also the maker of mustard, Jack Daniel’s Marinades, pickles, gravy, and a dozen more commodities, a company can use brand loyalty to cross promote. If a customer purchases ketchup, hotdogs, and buns, it would make sense to suggest Heinz pickles. It’s using the strategy of Amazon, which suggests a product to try based on recent purchasing.

The same type of strategy can be used for in store or online promotions. Knowing which customers regularly purchase a certain brand or product, a company can specifically invite them to participate in a promotion. Whether it’s introducing a new product, sale, or simply highlighting a traditional brand, it is valuable to know your best customers. The key, is to offer custom service based on the information they naturally provide through shopping. It is customizing solutions, customer service, and making each experience an exceptional one.

Brand Equity: Steps to build a solid loyalty program

Loyalty programs are used across the board among service industries. There is a difference in creating a successful loyalty program and a program that fails to increase customer satisfaction.

Terry Vavra, who is on the ICC/Decision Services team, shares the process in building a great loyalty program. Taken from “Loyalty Myths”, co-written by Vavra, Timothy Keiningham, Lerzan Aksoy, and Henri Wallard, here are the essential steps in starting a loyalty program:

5 Step Customer Loyalty Program

1. Observation. The first step is dedicated to accumulating customer data. This would include purchase history, service costs for each customer, demographic data, and share of wallet the customer contributes.

2. Scoring. If you organization took no further steps to promote purchases with a customer, what portion of sales would future purchases be? The value of doing nothing to excellerates more purchases from customers. This is a base score from where a loyalty program would improve on.

3. Selection. Prioritizing each customer based on scores from the above information, with further delegation into three categories: Desired, Break-even, and Costly customers.

4. Prioritization. Companies should prioritize the consumer categories in order of importance. Then narrow the focus of the loyalty program to concentrate on the biggest priority. Each company will have to decide what their desired goals are from the loyalty program. For example, determine whether it is to improve share of spending or controlling costs per customer group.

5. Leveraging. This is the combination of brand equity, value equity, relationship equity, and satisfaction, used to create a loyalty program. The end result is have the combination of four tools to move the customers from the starting score to the next level.

There are numerous aspects to creating a quality loyalty program. These are your first five steps to help get your organization off running. You can read more information on loyalty programs and the customer experience effect in “Loyalty Myths“, or contact Terry Vavra at ICC/ Decision Services.

What tactics has your organization used to develop loyalty programs? Are you measuring the effectiveness of the programs?

Tags: brand equity, Brand Loyalty, customer loyalty programs

Sprint Extends Customer Loyalty Programs

Sprint continues to invest in making their customer service programs better.  The company knows how important it is to create a great customer experience for new and loyal customers. 

Sprint’s new loyalty program, Sprint Premier, is designed to reward loyal customers with extended perks. According to FierceWireless, Sprint Premier’s benefits include early upgrades, special event tickets, sneak peeks at new products, and accessory discounts.

The most appealing portion of Sprint’s loyalty program is the courtesy plan check.  Customers with plans over 6 months, will get a courtesy check up to ensure they are getting the most value for their plan.  

Companies such as Sprint, know how rewarding it is to have a strong customer loyalty base and it pays to give back.  In your own companies, what types of customer loyalty programs are implemented? What are other examples of great customer loyalty programs you’ve seen or been a part of? 

For more information on the loyalty program, visit sprint.com/premiercustomer.com