[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.the-future-of-commerce.com\/2015\/04\/16\/data-drives-the-transaction-not-the-other-way-around\/#BlogPosting","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2015\/04\/16\/data-drives-the-transaction-not-the-other-way-around\/","headline":"Data drives the transaction, not the other way around","name":"Data drives the transaction, not the other way around","description":"Think about most of the loyalty programs you belong to for a moment. What do they have in common? If you said they are simply points or punch card-based, you\u2019re correct. So many loyalty programs \u2013 whether they are physical or digital \u2013 fall down by focusing only on the transaction: make a purchase, track […]","datePublished":"2015-04-16","dateModified":"2024-03-01","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/jenna-posner\/#Person","name":"Jenna Posner","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/jenna-posner\/","identifier":112,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/d44e246cb32ee4f2dc3cedb116cf3c09ec58d42d9569716a40c626734544bc9c?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/d44e246cb32ee4f2dc3cedb116cf3c09ec58d42d9569716a40c626734544bc9c?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"The Future of Commerce","logo":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","width":172,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2015\/04\/letters-spelling-loyalty-image.jpg","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2015\/04\/letters-spelling-loyalty-image.jpg","height":550,"width":930},"url":"https:\/\/www.the-future-of-commerce.com\/2015\/04\/16\/data-drives-the-transaction-not-the-other-way-around\/","about":[{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/customer-experience\/","name":"Customer Experience","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Customer_experience","http:\/\/www.wikidata.org\/entity\/Q984142"]},"Retail Trends, Data, News","UX"],"wordCount":732,"keywords":["Big Data","Commerce","Customer Engagement","E-commerce","Ecommerce","Marketing","Omnichannel","Personalization","Retail","Shopping"],"articleBody":"Think about most of the loyalty programs you belong to for a moment. What do they have in common?If you said they are simply points or punch card-based, you\u2019re correct.So many loyalty programs \u2013 whether they are physical or digital \u2013 fall down by focusing only on the transaction: make a purchase, track your spend. However, with the onset of digital \u2013 and more recently mobility \u2013 brands have new opportunities to define what loyalty means. It should not solely be about the transaction, but rather the ability to establish an emotional relationship with the consumer: my feeling of connectedness to the brand, my perception of how much the brand understands me and its knowledge of what I want from it before I do. That\u2019s what loyalty means today.Data Driven Loyalty, Not Transaction BasedLet\u2019s consider one industry where the punch card-based loyalty program is very rote and routine: quick service restaurants (QSRs). Buy nine burritos, get the tenth\u00a0free. It\u2019s very easy to track how many meals customers have purchased \u2013 just punch a card and when the customer turns in a fully punched card, provide the free meal. It\u2019s simple to execute, but that\u2019s about it. The restaurant doesn\u2019t get any data from it, meaning, it doesn\u2019t know anything about the customer who is buying the food or visiting the restaurant. Another missed opportunity is leveraging that data to inform communication with the consumer. The transaction doesn\u2019t even come close to telling the whole story.A big reason companies, QSRs, retail and the like have traditionally taken a transaction-based approach is because they likely are dealing with siloed systems, such as an e-commerce channel, multiple POS systems, social networks, third-party data, CRM and more. If a consumer buys on a company\u2019s e-commerce site and then they buy in-store, the disparate systems don\u2019t connect the dots, resulting in the consumer being treated as two independent consumers, rather than one consumer that shops across channels. This can have a negative impact on the customer experience, giving the (realistic) impression that the brand doesn\u2019t really know who the individual consumer is.Loyalty today is about everything leading up to and expanding beyond the transaction itself. The transaction event is almost meaningless within the new construct of loyalty. Loyalty is tied closely to the customer\u2019s experience. It\u2019s not just about punch card-based rewards and giving them something, it\u2019s developing a relationship throughout the experience. On every step of the path to purchase, every interaction helps to build loyalty.The digital age has allowed loyalty to meet its potential. We now have access to every possible touch point where the consumer could be. This requires a digital interface and a sophisticated data warehouse running behind the scenes to enable the kind of personalization ultimately catalyzing that feeling of connectedness. It\u2019s new, but it\u2019s here.By centralizing all those data sources and synthesizing it to get a holistic view of the customer, the brand is then in a position to identify its best customers and develop campaigns that are personalized to the individual \u2013 based on where they shop, when they shop, what SKU\u2019s they may buy and more.The more personalized the brand is to its customers, the more it is able to increase spend and frequency. These are two of the KPI\u2019s that are most impacted by a data-driven approach to loyalty. Others include decreased time between visits, increased social advocacy, channel behavior (do I spend more online, but shop more frequently in-store?), SKU preference, social activity by channel, sentiment, influence, and customer lifetime value. This data is important not just for historical analysis, but more importantly to alter customers\u2019 behavior going forward. Understanding that data helps measure future performance to determine what\u2019s working and what\u2019s not working.Another critical component is customer segmentation. It\u2019s not just segmenting by demographic or purchasing frequency, but rather having a system that can understand all the obscure correlations that exist within the data to programmatically create new, more granular segments of customers and manage personalized campaigns for each one.Going back to the question I used to open this article, what does an average consumer\u2019s loyalty programs have in common? In the new era of data-driven loyalty, the ideal answer should be, \u201cnothing, they\u2019re all unique.\u201d"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2015","item":"https:\/\/www.the-future-of-commerce.com\/2015\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"04","item":"https:\/\/www.the-future-of-commerce.com\/2015\/\/04\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"16","item":"https:\/\/www.the-future-of-commerce.com\/2015\/\/04\/\/16\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Data drives the transaction, not the other way around","item":"https:\/\/www.the-future-of-commerce.com\/2015\/04\/16\/data-drives-the-transaction-not-the-other-way-around\/#breadcrumbitem"}]}]