One of the biggest benefits of B2B loyalty programs is the ability to build a dynamic database of active customers that gives your marketing and sales teams additional touch points and topics of conversation. Incentive and loyalty communications have great engagement rates, as they share an alternate brand message to typical outbound sales.
Rewards, value & status – all benefits above and the day to day customer relationship. The biggest risk of these is avoiding a “one size fits all” message – as not every customer within your program is the same!
This can be a bit of a tightrope challenge, as you need to ensure you’re not bombarding them with messages that are irrelevant to them, as that can reduce engagement with your program and brand, which is the exact opposite of what a loyalty program should be doing with your high-value customers!
Ideally, you’ll want to create messaging that narrows in on how these customers engage with your program and speak directly to them. You might think this goes against what we’ve already said about how customers engage differently, but we’ve got a solution to this!
The best program communications should speak directly to each customer. Building a framework of understanding how each member engages with the program is integral to the success of your program, and that framework must consider engagement and success measures.
We feel the best way to speak individually to each participant is customer segmentation, based on the levels of engagement and activity within the program. We work with our clients to gain data-driven insights into each customer, funnel them together into loyalty cohorts, and create bespoke communications that align directly with how these customers act while fuelling further engagement.
These communications present messages and offers that speak to aligned cohorts, allowing your customers to feel that they’re truly being listened to and understood – which we believe is key to promoting your brand above competitors. With individualised communications, we have seen behaviours be changed for increased growth and share of wallet.
Customer Segmentation
Targeted Engagement Campaigns
The importance of customer segmentation lies in the ability to understand where participants are currently within the program lifecycle and build engagement campaigns with targeted messaging for cohorts.
These campaigns allow us to provide:
- more flexibility in the communication types and messages we include.
- the ability to adapt messages to changes in the market, new products or services, and recognition.
Ideally, no customer will stay static within the program lifecycle. We work to capture customers and re-engage through these personalised communications, each speaking to a specific cohort of customers and their place within the program at that current time.
These messages need to be specifically tailored – i.e., no need to send a “we’ve missed you” message to active participants, to avoid making them feel like they’re not being individually considered.
The length of time and number of interactions that a customer has in a B2B loyalty program are equally important. The more these two metrics increases, the more effectively our Engagement Loyalty Model (ELM) reviews data to segment customers and reveal insights about them. This gives clarity around the actions you need to take to meet program and customer objectives.
So, now that you recognise what customer segmentation can do for your campaigns, it’s time to review the metrics we use to build these segments.
Personalised Cohort Communications
While each customer will consider themselves unique in the way they use the program, our experience has shown that there are generally six loyalty segments (i.e. cohorts) that develop over time in any loyalty program.
Out of these six, we’ve found that the biggest impact can be derived from three specific customer segments: Savers, Regular Earners, and On The Way Out.
Creating personalised, bespoke communications that speak directly to these cohorts allows your program to drive engagement via redemption of points or increased sales aligning directly with reward targets. This also gives your business an understanding of who your top performers are, and their buying habits for your brand.
Successful messaging and communications for these groups will give your loyalty program a greater lifespan and can influence the way the customer views your brand.
Savers
These participants will likely sit on a high point value, waiting for the perfect item – or, they may be disengaged from the program while still passively participating.
While these sound different, the outcome remains the same. Your target should be campaigns to drive redemption of points, allowing your program to celebrate the individual’s success. This creates trophy value through their rewards.
The Savers group is likely to comprise your ‘top customers’ based on spend. Providing additional messaging for this group is well worth the effort, and can include exclusive offers, discounts, or promotions that incentivise them to keep earning more.
Regular Earners
Active users who regularly redeem rewards and earn points are valuable to the program, as they’re likely to continue engaging with the program over time.
These ‘Regular Earner’ customers consistently earn points, but their total points balance places them in a mid-tier compared with other program members. They frequently redeem points, not due to disengagement but due to their earn rates.
Customers in this cohort are ‘growers’ – the group with the highest opportunity value for points earning and, therefore, sales increases. There is potential to move them to higher annual purchases and up a customer tier financially.
On The Way Out
You’ll never have every customer feel that the program is giving what they want. Identifying this group can help both the loyalty program and internal sales teams.
Customers ‘On the Way Out’ are reducing their spend and earning fewer points. There can be several reasons why they’re in this group; you might be losing them to a competitor, they may have redeemed all their points and are disengaged, having achieved their goal.
If that’s the case, it’s time to find ways to re-engage. Your advantage is that you already have a relationship with this customer, and they’ve been sold on your brand enough to have been consistent with their spending at one time.
Communication Backed by Insights
As you can see, loyalty cohort messaging is a valuable tool for loyalty program managers to increase engagement and retention among their customers. Backing this messaging with data insights just adds to the effectiveness and power of what your program can achieve.
By focusing on outcomes and tailoring your communications to the specific needs and behaviours of different customer segments, you can find a way to connect with each member and boost what you set out to do in the first place.
