Customer Loyalty and Engagement with CDP

Chief Growth Officer

Simple is always better. But a customer’s preference for consuming a product is always complex. The more the number of customers, the more is the number of complex patterns in a consumer market. Either in a B2B model or a B2C business, marketers could most often lose track of some game-changing and critical customer interactions and responses to the product and market. The limited visibility caused due to the way marketing tools are structured in an organization hides the clues that customers provide to marketers. Opportunities tucked in the nuances of siloed structure with lack of integration does not update the marketer of their existence.  The tightrope walk begins when you realize that you are not updated about your customers’ intents, preferences, or next steps. You might be trying hard to engage with customers but only to realize that they are not your customers! It turns out that there has always been a mismatch between your customer needs and what you offered them. Here is an autopsy of how your customer engagement efforts could lead to loyalty that reaps automated revenues. In the course of reading this article, you will be familiarized with
  • How to create a successful loyalty program using the key elements of engagement?
  • How to integrate your customer engagement efforts into the loyalty program using data that delivers conversions and measures the success? 
Note to readers: We have covered two examples. Each example is from a different industry. One from each industry – banking, and retail (home furnishings and apparel). Each example would cover a unique set of marketing channels and touchpoints that are being used by the brand to create a customer journey. 

Key Elements of a Successful Loyalty Program

Right from the beginning to the point of circling back in a loyalty program six elements keep the engagement intact.  It begins with a collection of touchpoints that make customer subscriptions to the loyalty program a seamless and frictionless process. Each subscription should be invited and greeted with a personalized experience, keeping the communication and interaction exclusive. The overall process for the customers should be made intuitive. This requires the program to be predictable by repeating the same steps, familiarizing different aspects of the program wherever possible and ensuring consistency all through. 
  • Seamless On-boarding
  • Personalization and exclusivity
  • Familiar, Repeatable, and Consistent process
  • Action-oriented and Conversions
  • Fair value – where the customer also feels they are winning
  • Rewards
  Each stage in a loyalty program needs to be translated into actions that can be measured as micro-conversions. The loyalty program should be more than a logo printed on a swag. The value that the customer gets needs to be clearly articulated. The last element is the most important one. A loyalty program without a reward is no program at all.
Loyalty Program Banking Retail
Objective Create recurring personal loan subscriptions Convert frequent customers into loyal shoppers during the high-sale winter season
  • Chatbots
  • Email
  • In-app experience or e-store experience
  • Listings and recommendations – on mobile, via WhatsApp
  • Affiliate store branding
  • Ads
  • Social Media
  • Offline Branch level interactions
  • Chatbots
  • Email
  • In-app experience or e-store, offline and in-store experience
  • Listings and recommendations – on mobile, via WhatsApp
  • Affiliate store branding
  • Ads
  • Social Media
Touchpoints Discovery Onboarding Exploration Adoption Redemption Repetition Discovery Onboarding Exploration & Research Purchase Redemption Repetition
Exclusivity EMI model available with low rates available upon getting closer to loan repayment completion Flaunt your trust score. Smart buys. Cool Fundraisers Points to share what you bought on exclusive Share a tourist image with brand logo stickers on social media and redeem points at the local eatery.
Repetition Share after you buy Redeem points in your next buy The digital coupon that can be redeemed against the total amount of the bill.
Conversions Micro conversions
  • Trust score
  • Smart buys
  • Cool fundraiser badge
  • Completion of monthly payments
  • Personal loan subscription
  • Personal loan payment completion
  • Personal loan re-subscription
Micro conversions
  • Winter cart additions
  • Coupon redemptions
  • Creating a winter wishlist
  • Share after you buy
  • Purchase completion
  • Reward redemption for next sale
Value proposition Your loyalty to the brand would help you secure personal loans faster with the longer repayment cycles at lower interest rates for subsequent loans.  Loyalty to the brand would provide smart buys that give you great discounts all through the season.
Rewards Longer repayment cycles at lower interest. Digital Coupons during the festive season Personalized recommendations and discounts.
  The above table represents how the design of a good loyalty program includes all elements that make it successful.

Integrate your customer engagement efforts into the loyalty program

Let’s assume you want to target the two most important personas and you need to identify customers who belong to that persona. Therefore, you begin the following steps to integrate both engagement and loyalty programs:

Step 1: Develop criteria for high-value cohorts

The criteria of cohorts are determined by the objective of each loyalty program. For instance, the objectives mentioned above showcase that these programs want to transform high-converting customers into brand loyalists. So, the criteria look something like this: 
Criteria to choose cohorts for a Loyalty program
Banking Score Retail
History of subscribing to personal loans 25 History of purchasing products from the online store 25
The credit (FICO) score is above 650. 30 Has redeemed coupons in the past 25
History of successfully remitting all installments of previous personal loan 30 Has bought more than two types of woolen clothes 30
Still repaying an existing loan 10 Has purchased woolen home decor articles from the online store 30
Looking for loan amounts between $2,500 to $35,000 20 Has used a gift option 10
Visited other lending websites such as Lending Club, Prosper, Upstart, etc 10 Interacts with chat interface on the website during a purchase 20
‘Loan use’ categories are any one of them: home repairs, vacation, home automation, hobby business, special occasion celebration. 15 Uses wishlists 10
‘Loan use’ categories are any one of them: relocation, vehicle, debt consolidation (-) 10 Interacted with an ad earlier 10
Loan term between 2 to 7 years 15 Follows the brand on Instagram 15
Has a salaried account with our bank 15
A first-time personal loan seeker 5
Preferred loan repayment methods: auto payment/ auto-debit 20
Preferred loan repayment methods: physical cheque/ manual bank transfer (-) 5
  Once you have the criteria, create a scoring system where you assign points to each criterion  You can add a negative score too to avoid the selection of customers who may not meet your loyalty program objective.   FirstHive provisions for auto-segmentation. This is a feature that learns about customers and their response to different campaigns from previous campaigns. It uses the above-mentioned criterion and adds its intelligence to gather best-suited customers for each cohort for executing a campaign.

Step 2: Identify Data sets that auto-segment cohort

The metadata assigned inherently to each customer in a CDP creates cohorts using datasets. These datasets created in FirstHive specialize with first-party customer data. It uses first-party data to create a cohort that is exclusive to the loyalty program. Use Datasets to create micro-segments. Build data sets using information such as customer demographics and key characteristics, products held, credit-card statements, transaction, and point-of-sale data, online and mobile transfers and payments. Similarly, you could use other characteristics such as motivations, product preferences, use of a product, shopping frequency, lifestyle, shopping behavior, and so on for retail campaigns. Your personas will provide the necessary characteristics that you would provide as an input to the CDP. Since a CDP is designed to gather data across all configured marketing channels and interactions, the necessary data would be drawn automatically.  Add what are the data points a Customer Data Platform can provide for you to buff up the persona and know more about each customer.
About Brand Loyalty Program for a Bank called ‘Creditmark.ABC’ based in New York, but has 56 other branches across the country. Loyalty Program for an online retail store called ‘’. Has frequent buyers and highest visitors from Canada and northern parts of the USA.
Tara (add age, gender, marital status,  George Britney Anne
Personality and Lifestyle Single Millennial Visits P2P lending and other 3rd party lending websites. Family Man has taken quick loans for home automation, car enhancements, trave, and vacation. Teenager Student loves deals, offers, discounts and sale periods. Uses gated pocket money for shopping online. Small home business owner and homemaker. Disciplined money tracker. Rewards herself, purchases gifts for her family.
Lives at Downtown Brookdale Midtown Herald Square, New York Seattle, Washington D.C Calgary, Canada
Background Track
  • Has a salaried account with this bank.
  • She owns a credit card.
  • Has a student loan.
  • He owns insurance policies for all his family members
  • He has a mortgage loan 
  • Has a salaried account with the bank
  • Has a credit card
  • Caps, trendy tops, trench coats are her common buys.
  • She has subscribed to the deals and discounts notification of the website
  • Loves hand knitted sweaters.
  • Also shops for child-size sweaters with hoods.
  • She has used coupons out of 40% of her past purchases.
Channel affinity Use the mobile app of the bank to interface with different services and products of the bank. Stays in touch with customer support and uses phone banking to interact with the bank. Completes purchases on mobile. Used Instagram links to discover clothes. Has bought twin sweaters in the past. Uses a tablet to shop at leisure Redeemed coupons from Whatsapp mom groups
Work-life and Occupation She works in a creative media agency. Engineering job A student with side gigs Entrepreneur
Motivations Credit card transactions for tickets and travel. Purchased online diploma course certificates. Loves dining out. Taken quick loans for home automation, car enhancements, travel,  and vacation. She uses her school dorm as her delivery address. She has wish lists created using a neck style filter. She has selected the gift option and used other addresses for delivery apart from the normal one.  Likes gifting for occasions.
Criteria Score match 90% 80% 82% 78%
Tara and George customers of a bank named ‘Credit Mark’ are frequent customers for personal loans. They subscribe to personal loans quite often and have a good credit score. Britney and Anne are also frequent visitors in the e-store CDPs use the earlier criterion provided by a marketer and map it to personas that are updated into the database. If you choose to target any with over a 75% match, then customers who meet the match score criteria, as well as the cohort criteria, get settled into a cohort that gets auto-created for loyalty campaigns. 

Step 3: Create a list customer journey map with touchpoints using a list of high converting channels for selected cohorts

As mentioned earlier, the following channels are chosen to create a customer journey map. Using this matrix, you can determine how you would want to interact with each persona. You can also point out when and how would you introduce rewards during this journey.   
Discovery Onboarding Exploration Redemption Purchase Repetition
Chatbots Prompt an offer when logs into e-store Share coupon code and product recommendations Prompt money value on the existing cart value. Prompt new coupon code that can be shared with friends. Display other relevant products using next-product-to-buy model (NPTB) Apply ‘Next Best Offer Modeling’ to display the other coupons that she could redeem with future purchases
Social Media Target messages on Instagram with coupon codes Show what products are bought by similar people in the cohort Uses coupon codes displayed on Instagram
Ads Ads on 3rd party websites that provide comparative details Show other complementing options and coupon code Retargeting
In-app experience or e-store experience Show offer pop-up Recommend what a winter wish list should include Send an email with an article on how to style up with the products Show how much she can save with the existing coupon and the one that she would share. Recommend to flaunt the new purchase on instagram with hashtags
Affiliate store branding Influencer branding Redeem coupon even at stores nearby. Provide list of stores
Email Send an email update Welcome email with an offer Purchase confirmation with other recommendations Reminder emails with style tips and use of coupons.
Listings and recommendations Add discount sale offers to listing websites Provide how to style with sweaters articles on 3rd party websites Provide review ratings and what other customers say about that product category Mention money value and winter offers
Use the campaign management feature to automate communication as much as possible.  FirstHive’s campaign manager allows you to create logical flows and determine which communication collateral needs to be presented to the customers of a cohort at every touchpoint.  The above matrix represents how content on each channel is consumed by a single persona Brittney (from the retail example). Some channels work best to introduce the offer and the campaign while others are best for redemption. 

Step 4: Customize the communication and rewards for each cohort

Let’s look at how you could customize ads for different personas. Without data, you would probably create a generic ad. But data tells you a different story. It shows that some elements of the Ad are of no interest to the ‘ideal persona’ that you are targeting. Then, you need to tweak your ad.  Use further rules and filters to customize the campaign for your customers.  If you are targeting a persona like Brittney, she would be excited to see scarves, caps or Gabardine coats and suits on the ad images rather than pictures of thermals, blankets, and cushions that are probably preferred by other personas.  The next bet would be to show woolen shirts with different trouser and skirt combinations.  When data tells you a single fact then, you can apply multiple models to try conversions. Some models designed into rules and triggers are here below:
  • If product category = [scarves], then show [caps].
  • If [sweaters], then show product category [shirts, skirts].
  • First [coats] AND is [female] AND [student] , next show [caps, scarves, trench coats, double-breasted coats, hood jackets].
“The reality is that consumers want better personalization: approximately 80 percent of them say it’s important to them.” — McKinsey & Company Applying these rules could be a one-time effort for marketers using intelligent Customer Data Platforms like FirstHive. The in-built algorithms can learn from conversion behavior and further customize content for each customer.

Step 6: Measure the loyalty program against the measurement scale 

Create a list of metrics that correspond to the objective of the loyalty program. Some metrics that you could explore in FirstHive’s Reporting and Analytics Module are:  
  • No. of coupons redeemed by customer, by product and by location.
  • No. of conversions from regular customers to loyal customers.
  • Most converting campaigns for each cohort.
  • Most converting campaigns on each channel.
  • Most responsive and converting cohorts for each campaign.
  • New behavior patterns watching the trends.
  • Most bought products during the campaign period using loyalty cues vs during no push-activity.

CDPs augment loyalty programs

Successful digital banks deliver a truly seamless multichannel experience by gathering real-time data and using analytics to understand the customer and build a consistent journey view. Similarly, successful online loyalty programs are designed using data analytics models from data marketing. Some of the most common models being
  • Next Product To Buy (NPTB)
  • Recency-Frequency-Monetary model (RFM)
  • Collaborative filtering for recommendation engines
  • Sequential Pattern Mining
  • Compatibility Fuzzy Relationships 
  • And more
Emergence and providence of people-based marketing compels marketers to know people rather than just the channels and campaigns. This requires you to be able to see real people in a Customer Data Platform rather than disparate data points.  Disclaimer: The names used in this article are fictitious and do not intend to imitate or depict any person in real or imagined. They are used to ease the understanding of the concepts explained in this article.

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