Loyalty marketing sits at the heart of what a good corporation ought to do- retain its clients. With advancements in technology, loyalty programmes have the potential to become a centre of useful, practical insights for the entire business and not just the marketing department.
We caught up with Sandeep Mittal, managing director of analytics firm Cartesian Consulting, to find out the potential of loyalty programmes and the data collected as a result to transform how a company does business.
Mittal will be speaking at Marketing magazine’s inaugural Analytics Interactive conference, happening on 20 March. To find out more, please click here.
Marketing: Would it be true to say that while loyalty programmes are a good source of customer insights a lot of companies don’t leverage them effectively?
Sandeep Mittal: I think that’s very much true. Most people understand they should use loyalty data better but don’t have the right skillsets and tools to make that happen. The skills required are a little different to how most marketing people usually operate. Marketing people are more likely to think, for example, what dresses they should feature in their next product line, as opposed to which dresses are most likely to be popular with customers. Their thinking is attuned with the product and the brand, not necessarily with the customer.
Marketing: Can you give us an example of how you improved a company’s loyalty programme in order to make it the centre of insights for the whole company?
Sandeep Mittal: We worked with a major international fashion brand (I can’t reveal their name, but they are huge). They ran a loyalty programme which now has about 1.5million members. For the first couple of years in establishing it, it was really about getting the whole programme in place, getting enrolments and so on. In the third year, a number of other departments began to look towards the loyalty data for insights – retail operations, merchandising, commercial and others. Retail operations wanted to optimise the product assortment, which is now driven by the loyalty data because they have an idea of the kind of customer each store has. The loyalty programme allows them to look at the average age of the customer, the male/female ratio of their customer base, which kinds of customers are buying premium products- things that can’t be seen without a loyalty programme. Thus, loyalty programmes allow you to see metrics from a customer standpoint. It doesn’t necessarily change your branding, but your customer awareness becomes a lot better.
Marketing: So which departments benefit the most from a strong loyalty programme?
Sandeep Mittal: In a retail context at least, I’ve found that after marketing, the merchandising department finds loyalty programmes most useful in deciding product mix. They can integrate loyalty data with inventory data to see who is buying what. After this the commercial department finds loyalty data very useful because the data links to cost and profitability. CFOs, for example, can look at loyalty data to look at who their most profitable customer is as opposed to who the highest spending customer is. If they want to reduce discounting to improve profitability, the loyalty programme can help identify customers who will still buy at full price – so the CFO can reduce discounting intelligently.
For sponsorship information on Analytics Interactive, contact Che Winstrom at chew@marketing-interactive.com or call + 65 6423 0329.
To attend the conference, contact Carlo Reston at carlor@marketing-interactive.com or call +65 6423 0329.
You may also contact Ambrish Bandalkul at ambrishb@marketing-interactive.com to learn more about the agenda and speaking opportunities.
Marketing is also organising a 2-day conference on Customer Loyalty, a week after Analytics Interactive, on 27-28 March, please contact Che Winstrom at chew@marketing-interactive.com or call + 65 6423 0329 for sponsorship opportunities and Hairol Salim at hairols@marketing-interactive.com for speaker opportunities.
To attend the conference, contact Carlo Reston at carlor@marketing-interactive.com or call +65 6423 0329.