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Gartner Brand Performance Report shows value of Loyalty Program
Every year, market research and analysis company Gartner measures the digital performance of well-known brands and translates the results into their annual Digital IQ Index. Recently, they analyzed the performance of 1,402 companies over 15 industries and used hundreds of marketing data points. Remarkably only 3% received the “Genius” classification, which is surprisingly disappointing for many brands. These geniuses grew revenue by 8.6% compared to the year before and achieved 10.9 times more site traffic than their peers.
Brand Marketers can learn 3 lessons from the top performing brands, and interestingly, they are all related to your loyalty program:
Lesson 1: Exchange of Customer Data
Genius brands are quite good at obtaining customer data and they prioritize collecting ‘first-party data’ (or even zero-party customer data), contrary to advertising brands who mainly use third-party customer data to attract customers. They use this first-party data to provide a better customer experience and develop high-quality, exclusive content that makes sharing personal information worthwhile. Adding loyalty rewards for sharing personal and preference data to the equation, plus the identification of identified behavior, enabled by their loyalty program, allows them to build up a larger and better database with first-party customer data compared to brands that focus at advertising. These brands also invest in interactive tools to address common customer problems, such as smart product visualizations or handy price calculators, which are used more than average when placed in a ‘my account page’ typically found in loyalty programs.
Lesson 2: Long term and short term thinking
Genius brands strike the right balance between short and long-term strategies. They don’t just focus on ad hoc advertising for quick results or at a static content strategy for the long-term. Genius brands are relatively quick to identify trending interests and adjust their advertising strategy accordingly in order to gain market share before the competition catches up.
Part of their genius smartness is that they create both ‘fast’ and ‘slow’ content. This is to quickly gain visibility on popular topics, while building credibility on important themes. How do they realize this strategy of spotting what’s relevant to their customers, you could ask? The answer is largely to be found in the loyalty program: they use customer data they collect with their loyalty program (see next lesson) and with review/rating features.
Lesson 3: Tailored customer journey
Winning B2C brands offer a tailored experience that meets the different needs of customers in the purchase process. They allow customers to set goals or identify problems with VR tools, virtual planners, digital advisors, or handy analysis instruments and they do this 2.2x better. The best performing B2B brands provide self-service for an increasing number of customers who prefer to shop without representatives.
These three lessons will prove to be of growing importance in the coming years, when third-party customer data will be used even less so due to changes in cookie-storage in browsers and the strongly decreasing ROAS. The most recent AI driven wars between the advertising giants won’t help brands to plan and predict a sustainable advertising strategy, so genius brands with loyalty programs will profit even more from their relatively stable access to first party data. Smart brand marketers should design their roadmaps accordingly.