DDM - Retail Trade

Consumer Insights for Retail Loyalty Case Study

Issue link: https://resources.datadrivenmarketing.equifax.com/i/883584

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How Retailers Can Use Consumer Spending Insights to Help Enhance Loyalty Programs use case Retailers want to increase the number and quality of their loyalty program members, yet their customer segmentation systems often lack the ability to efficiently identify new, high-potential customers, as well as those that are unlikely to justify tailored marketing efforts. Retailers can work with Equifax to score their customer files with estimated spending capacity measures to help better differentiate customers by their spending trajectories, quickly apply focused strategies to high-potential new customers, and adjust loyalty program members. Challenge: Help evaluate and grow membership of retailers' loyalty programs and improve efficiency of marketing programs Many leading retailers have loyalty programs that help them build stronger relationships with their most important customers and incent additional spending with their brands. Members of loyalty programs are often the number one source for the target audience for marketing campaigns; however, many retailers are concerned about the quality and quantity of loyalty program members. Retailers may be faced with several challenges in assessing and growing their loyalty program membership: ■ Difficult to identify current customers that have high spending within the category, but are not yet enrolled in the loyalty program: Retailers often find it difficult to uncover category enthusiasts, who may have shopped once or twice at the retailer, but who spend the majority of their money at competitive stores. Retailers can benefit by identifying these customers and including them in their loyalty programs. ■ Unable to efficiently pinpoint new, high-potential customers, resulting in missed sales opportunities: While many retailers gain hundreds of new customers every day, their segmentation systems often lack the ability to quickly reveal which new customers should receive special marketing offers and treatment via the loyalty program, thus resulting in missed sales opportunities. CHALLENGE Assess members of retailers' customer loyalty programs and help find new high-potential customers. RESPONSE Enhance retailers' customer segmentation systems with consumer spending insights to help identify new and long-term customers that may warrant additional marketing focus based on their likely spending capacity and potential, as well as differentiate current loyalty program members that may be downgraded. OUTCOME Help improve marketing efficiency by focusing promotional efforts on those customers that more likely have higher spending capacity and potential, while helping reduce marketing efforts spent on customers with lower spending potential.

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