We’re all familiar with this kind of offer: “This week, get 3 chocolate bars for the price of 2 – for loyalty club members only.” No doubt, it’s an effective offer. But it is broad and generalised.
Now, consider a different offer: “During your birthday week, get 33% off all chocolate bars.” It’s still a fairly generic offer, but slightly more personalised and, as a customer, you’d probably feel marginally more special.
Now imagine that it’s your birthday week and you happen to visit your local supermarket. While you’re there, your phone pings and it’s a message from the store, saying, “Great to see you in our shop today. Please enjoy a free chocolate bar, on us. And happy birthday!” Assuming you’ve given consent for the store to gather and use information like your location, you’d probably be delighted, and inclined to keep supporting this supermarket loyally over others.
These examples illustrate impersonal, personal and hyper-personal rewards, respectively. And there are two things that differentiate them.
The first is data. Reward 1 (impersonal) required no data about you. Reward 2 (personal) required some information – your birthday. The last reward (hyper-personal) required biographical, temporal and geographical information (your birthday and your live location).
The second thing that differentiates them is how they make you feel as a customer. The impersonal reward doesn’t evoke any particular affinity. The second is a nice gesture. But the last makes you feel more special, and more enthusiastic about coming back again.
Making hyper-personalisation cool, not creepy
It’s crucial – legally, ethically and emotionally – that data should only be used with a customer’s explicit consent. And there are ways for brands to ask for it – not by hiding it in data use policies or Ts & Cs, but rather, for example, by asking a customer what she wants when she signs up for a loyalty program or logs into an app.
It’s worth noting that there are individual (and often generational) differences in preferences around how data is used. Some people want minimal or no information about them to be collected and used, while others actually expect brands to use whatever of their data is required to create the best customer experience. Brands should respect their customers’ choices.
When those wishes are respected, data can really elevate the way rewards are delivered, making them exceptional, and contributing to a long and mutually beneficial relationship.
More data, more delight
The graphic below illustrates how data can be used to hyper-personalise rewards. The more a brand knows about David, the more relevant and immediate it can make the reward.
Think about David’s experience in each of these examples. The discounted golf magazine subscription is nice, but unspectacular. The 2nd reward – discounted golf balls – is something he’ll use and appreciate. And in the last example, think about how much David will appreciate that ice cold drink after a few hours in the hot sun. It may not even be worth as much as the discounted golf balls (in rand terms), but the timing and relevance of it is something he’s likely to talk about and remember for longer.
The more data David is happy to share, the more timeous, relevant and memorable the reward can be. Over time, these kinds of hyper-personal rewards will make much more of an impression, and David’s loyalty is likely to be much stronger and longer lasting.
Why aren’t more loyalty programs doing more hyper-personalisation?
The mutually beneficial allure and potential of hyper-personalisation is clear, both for brands and their customers. So why aren’t we seeing more of it?
The first reason relates to what data brands have and what they’re able to do with it. Not many businesses have access to the kind or scale of data that will enable hyper-personalisation. And even if they do, they may not have the skill to find what’s relevant, or to analyse it in ways they can put to practical, innovative use. AI can accelerate this, as it’s able to look at data in ways, and at a speed, that humans can’t.
The second reason is about the knowledge and practicalities that go into implementing, executing and delivering: integrating data insights into a program, arranging the availability and logistics of rewards, communicating with customers, keeping track of loyalty points with bank-level compliance, foreseeing potential obstacles and building in solutions. Not many organisations have this skill or experience because it’s not their core business.
And then, of course, there’s the integration of the data and the rewards, and knowing how to use one to inform the other. On their own, managing data and rewards each require unique expertise and insights. Combining them, even more so.
That means there are opportunities for brands and businesses to fill the gap. The ones that do it more impactfully, more delightfully, and more regularly, will make more of an impression on, and more of a connection with, their customers. These brands will win the hearts, minds and loyalty of their customers – with all the rewards that come with it.
