Customer Loyalty

Loyal customers are your brand's biggest sales opportunity–spending an average of 67% more than comparable transient consumers.

A new era in consumerism is ushering in highly personalized service models and deep, lasting relationships with a loyal customer base. This shift towards relationship marketing emphasizes building a strong customer loyalty program to facilitate that relationship.

Key Takeaways:

• Personalized experiences create brand affinity and drive loyalty. 
• Strong relationships transcend temporary instabilities such as a recession.
• 52% of consumers choose brands based on loyalty programs

What is relationship marketing?

Relationship marketing is a long-term strategy that creates opportunities to nurture customer relationships. For many brands, repeat customers are willing to spend more and happy to keep coming back.

It's still just one piece of the marketing puzzle, but priorities are shifting. Instead a singular focus on new conversions, a relationship marketing strategy invests in retaining the customers that have already converted.

From a return on investment perspective, it's a logical approach.

A relationship marketing strategy might include:

• Obtaining and Listening to Customer Feedback
• Curating Personalized Experiences
• Enhancing Customer Service Delivery
• Establishing a Rewards Program
• Embracing an Omnichannel Approach

Why relationship marketing is important

Consumers increasingly demand deeper commitments from the brands they shop with. According to Salesforce, 73% of customers now value trust when choosing where to shop. Understanding relationship marketing and customer loyalty can help companies connect with their consumers.

Increased Sales Opportunities

Focusing on customer relationships can increase customer loyalty. This benefits the brand in several ways. First, customer acquisition costs go down while sales numbers likely go up. Loyal customers spend more–and more often.

Second, loyal customers stick around. In one survey, 75% of loyalty customers had been with a brand for over a decade. Imagine the purchasing power of an engaged customer over 10 years.

Generating Brand Awareness

Loyal customers are your strongest advocate. A deep-rooted part of our social human nature hinges on modeling behaviors. We're born with the instinct to mimic, look for examples, and adopt modeled behaviors from those around us. We’re also equally inclined to share or model for those around us. 

For brands, this means that happy, loyal customers are eager to share the good news. And interested prospects are willing to hear it turning loyal customers into a perfectly primed engine for boosting brand awareness.

Long-Term Stability

Strong relationships transcend temporary instabilities. A dip in the economy often leads to consumer pullback on spending. When buying resumes, purchase power is fair game. Brand loyalty is the tie that binds bringing familiar faces back to the brands they trust.

Relationship marketing drives loyalty and retention

If repeat business drives sales growth, the hidden potential in loyalty-driven retention is an opportunity many brands have not yet fully realized. As marketers lean into creating customer experiences and cultivating deeper engagement through emotional connection, both brands and consumers benefit from relationship marketing.

Consumers get a positive, personalized experience ripe with satisfaction. Brands see more sales, a better return on ad spend, and growing loyalty that continues to feed an efficient marketing cycle.

Relationship marketing strategies to increase customer loyalty

The key to increasing customer loyalty is in your approach to managing that relationship. Let's look at effective ways to make the most of your relationship marketing strategy.

Customer feedback

Obtaining customer feedback through surveys and using that data to inform business decisions like product development, marketing strategies, customer service models, and supplemental services provides a brand with the best chance of finding and fulfilling customer needs. 

On top of providing genuine solutions, customers feel satisfied when their needs are heard and addressed. Engaging a 360-degree customer feedback model grows brand affinity through deep satisfaction creating loyal customer relationships.

Personalized experiences

Nobody likes to feel like another face in a crowd. We're wired to belong but driven to stand out. As consumers, we want the accessibility of commercial products delivered with personalized service. 

Brands can use intel generated from quality first-party data streams to personalize customer experiences. Doing so creates a sense of familiarity that breeds trust while simultaneously addressing the ego and connecting with customers emotionally to build loyalty.

Great customer service

It sounds simple – deliver great service and win customer loyalty. The problem is that priorities shift, and balls get dropped. While most brands would like to believe they're providing great customer service, reality paints a different picture.

The majority of consumers base purchasing decisions on the level of service they receive. This means providing attentive service from knowledgeable, trained staff. This can increase customer loyalty better than offering a lower price.

Rewards programs

Consumers love incentives. Over half (52%) of consumers say that loyalty programs influence their decisions to shop with a particular brand¹.

A rewards program is a specific type of loyalty program. Rewards increase the perceived value from the customers' point of view, providing a strong anchor for maintaining loyal customers. It's a simple concept, reward your most loyal shoppers for every dollar spent with your brand, and they'll spend more. 

First-party data from Cardlytics can help brands identify loyal customers and customers at risk of leaving based on the share of spend in competitive categories. This data can then help brands personalize rewards based on unique customer relationships. 

Omnichannel approach

An omnichannel approach recognizes that customers engage in a variety of ways. The same consumers who shop in stores will also interact with the brand on social channels. Similarly, shoppers that gravitate toward in-app purchases might also be eager to leave reviews on aggregate sites.

Customers aren't siloed to independent channels, and your marketing strategy shouldn't be either. An omnichannel approach builds trust and loyalty by providing a cohesive brand experience across all touchpoints.

With an omnichannel approach fueled by Cardlytic's first-party data, brands can easily identify new or lapsed customers so that you can deliver personalized re-engagement offers through uniquely personalized messaging and offers.

How Cardlytics Helps Brands Grow Customer Loyalty With Strong Relationship Marketing

The untapped potential in your loyal customer base can be reached through effective relationship marketing. Cardlytics solutions can support a stronger loyalty program by providing unique insights on customer behavior, including the share of wallet spend across competitive brands. Your brand can use this information to provide personalized offers to engage and re-engage customers every step of the way.

Sources:

¹“Shopper Story 2020: The New Consumer Mindset,” Criteo, 2020

Customer loyalty programs are a massive catalyst for building brand loyalty and increasing customer spend.  The question becomes how to construct an effective loyalty program. Should you compare cash back rewards vs brand rewards (like points or miles), or even cash back vs financing options?

Answering these questions  will have a great impact on customer retention and spending rates and impact the robustness and accuracy of your customer data. 

With top search engine providers like Google making the conscious choice to phase out cookies for third-party data collection by 2024, customer loyalty programs are an essential tactic to capture first party consumer data now and into the near future. So what's the strategy moving forward? How does your business optimize its loyalty program to keep customers satisfied without sacrificing access to information?

Key takeaways:

• Consumers prefer the instant gratification of cash back rewards over delayed rewards like miles or points.
• It's easier for brands to personalize messaging using loyalty programs to gather first party consumer data.
• Brands can enhance their targeting without third-party cookies.
• Starting in mid-2024, Google is phasing out support for third-party cookies, with plans to finish the phase-out by late 2024.

Instant gratification: why cash back is king

When evaluating cash back rewards vs delayed rewards, marketing and trends studies ultimately lean toward using cash back strategies for many reasons — the main one being the psychological "instant" gratification obtained from the transaction. Consumers immediately see that money going right back in their pocket when they make a purchase associated with a cash-back rewards program.

That's the opposite effect to other traditional programs such as points or miles, which require a significant amount of time before the benefits can be reaped — delaying the consumer gratification. 

Cash back is also generally easier to manage, understand, and earn from the consumer’s point of view compared to other programs — you spend money, you make money. In fact, 54% of loyalty program memberships are inactive. The number one reason being that it takes too long to earn points or miles for rewards.

The rising importance of loyalty data

Implementing the right elements of a customer loyalty program isn't just critical for revenue purposes but also for the advanced insights acquired through the data collected. Using an enticing loyalty system means you can ensure meaningful performance and behavioral insights are brought in and analyzed, to uncover the most engaged and valuable customers.

This powerful source of first party customer data lets you improve your personalized messaging toward your customers and makes it easy to design individualized promotional offers based on a buyer's behavior and previous purchases. 

There's even the added benefit of improved campaign measurements over time to see which content, deals, and messaging works best for its respective audience compared to others. Collecting this necessary loyalty data provides a better customer experience and a strengthened relationship between consumers and the brands they shop with.

Expand the power of loyalty data with Cardlytics

Brands can strongly enhance their market targeting through Cardlytics’ Purchase Intelligence™ and digital ad platform. Cardlytics, for instance, partners  with financial institutions, such as banks,  and leverages their online, mobile, and email channels to deliver ads based on first party consumer spending insights. 

In conjunction with data collected from loyalty programs, Cardlytics becomes a powerful tool to evaluate where your customers are shopping, when they are shopping, how much they’re spending, if they are brand-loyal, and if there are potential competitive market disruptors in your space. This information can then be used to develop purchase insights and make more informed business decisions.

Give cash back, get loyalty data

Loyalty programs increase customer spending, brand loyalty, and ultimately the total customer relationship value. Additionally, they offer premium data collection capabilities. That said, it's important to create a loyalty program that your customers will love and actually participate in.   

Therefore, you’ll need to diligently compare program structures such as cash back rewards vs points or miles and roll out the right rewards system. While traditional loyalty programs such as points or miles may have worked in the past, consumer behavior now shows that instant gratification in the form of cash back is more popular than ever before, as well as one of the easiest ways for the customer to manage and earn their rewards.  

By utilizing an effective rewards program with a first party data solution like Cardlytics, you can take data utilization to the next level. The platform's collection and analysis process brings data from critical customer channels to improve marketing strategies for your target audiences. Want to learn more about improving your targeting with advanced consumer insights? Contact us today to speak with an expert and learn how to take your data to the next level.

As parents and students gear up for another school year, retailers are scrambling to get their slice of the pie. Traditional gift-giving holidays aside–back to school is the second-largest annual shopping event.

The dust is still settling from the sucker punch that the COVID-19 pandemic hit the retail industry with. But there is hope on the horizon. According to Cardlytics’ purchase insights, 2021 spending was strong and showed signs of growth, with a few caveats. Here are the key trends to watch for as you plan your 2022 back-to-school campaigns.

Key takeaways

• Back-to-school shopping is the second-largest annual shopping event, accounting for up to 21% of all non-holiday spending.
• Spending across back-to-school categories is returning to pre-pandemic levels while the overall trend points towards fewer, more loyal customers.
• Uncertainty in school enrollment levels still looms, but retailers can make the most of the upcoming back-to-school shopping season by focusing on building customer loyalty.

The Importance of Back to School

Between school supplies, new clothes, sporting goods, and home decor–students and their parents make many purchases before going back to school.

The big back-to-school shopping season typically kicks off in early-to-mid June, with a peak in those final few weeks before school starts in mid-August. The uptick in sales tapers off by the Labor Day holiday, and retailers shift their focus to the December holiday shopping season.

But how big is big?

Cardlytics data shows that back-to-school shopping accounted for 6 out of the top 10 non-holiday shopping weeks in 2020. In fact, it comprised a whopping 21% of non-holiday spending that year, with only a slight dip to 19% in 2021, when back-to-school accounted for only 3 of the top 10 non-holiday shopping weeks.  It’s a surge in retail shopping that everyone from big box stores to specialty shops simply can’t afford to miss out on.

Consumers are spending more across popular back-to-school shopping categories. In 2021, we saw a 1.2% increase in spending over the previous year, despite a drop in customers and frequency. This growth highlights an opportunity for retail managers to focus on building customer loyalty to maximize sales across a noticeably shrinking pool of customers.

Customer Consolidation: Pre-Pandemic to Present

While spending is on the road to recovery, the landscape for retail has changed. The academic calendar drives back-to-school sales, but the number of shoppers and where and how they shop has undeniably changed. 

At face value, the numbers look good–all spending categories saw growth in 2020 and, with the exception of the home and office supplies categories, 2021 witnessed similar growth. One clear insight from 2021 is that the number of customers is steadily shrinking. That means a smaller group of shoppers spend more to account for the overall growth.

Breaking Down the Data

That could be a sign that customer loyalty is suffering. Convenience still seems to be a key driver for shopping decisions, pushing consumers to consolidate trips and shop with fewer brands. When looking at 2021 compared to 2020, there is a slight shift back to in-store shopping, up 3.4%, while online shopping is down 2.3%. 

It also makes sense that the 2020 spikes in books, supplies, and technology that fueled virtual learning are down 8.8% in 2021. Other trends that we saw come and go during the pandemic included an uptick in home decor spending as we grew bored with our surroundings, and dips in clothing and shoes with fewer opportunities to go out. 

The 2021 data shows that home decor is down 8.0%, clothing is up 24.3%, and shoes are up 28.6%. These are much closer to 2019 numbers, signaling a return to normalcy.

School Enrollment & Retail Trends

We can’t blame the pandemic for every little nuance. Lingering fears over supply chain issues, economic headwinds due to inflation, and erratic social behaviors have taken their toll on the retail industry. In difficult economic environments, consumers will look to find savings wherever they can to ensure they are maximizing the value of their hard earned dollars. Advertisers should look to promote deals and incorporate value messaging into their strategies this back-to-school season. As every purchase will be carefully considered, savings is the name of the game. Being able to put dollars back into customers’ wallets through rewards is an effective way to capture consumer spend. 

But there have been significant changes in public education as well. 

There are whispers about plummeting public school attendance rates across the nation. While we can’t say there is any direct link between school enrollment and back-to-school retail trends, it’s hard not to notice the numbers in two of the nation’s largest public school systems.

During the 2020-21 school year, coinciding with the height of the COVID-19 pandemic, Texas Public Schools dropped in attendance rates by 2.2%. It’s the first time Texas has seen a drop since the school board began collecting enrollment data. This decline is confounding considering that Texas also saw significant growth from domestic migration in the same year. 

Similarly, the California Department of Education released numbers for the 2020-21 school year, citing a decline in enrollment by more than 160,000 students. That was also a first in at least two decades for California schools.

Again, a drop in public school attendance doesn’t necessarily translate to a decline in shoppers during the back-to-school 2021 shopping season. These students are still learning–through homeschool, private school, or other educational programs and therefore still need school supplies, sporting equipment, and clothing. But there could be a correlation due to less pressure to be well-dressed or fewer requirements for educational expenses outside of public school systems. 

So, how do fewer customers during the school enrollment period translate to your customer experience strategy? It’s simple–the key is to focus on customer loyalty programs and the digital customer experience.

Loyalty Becomes the Name of the Game

Retail brand managers, e-commerce directors, buyers, and planners are regrouping to improve the customer experience and lure shoppers back to their stores. There’s a premium on building customer loyalty for the 2022-23 back-to-school shopping season. 

A smaller pool of bigger spenders translates to a higher value on each acquisition. Retail brands have been meticulously tracking the cost of gaining a new customer and comparing it to the cost of keeping that customer. And those data sets aren’t going away any time soon. They’ll get more attention as boardrooms full of marketing professionals and business executives try to crack the code for the retail customer experience.

As you pour over the numbers, remember that Cardlytics data can provide a more complete picture, helping you re-evaluate a customer’s lifetime value in today’s market.

The Bottom Line on Customer Loyalty and Back to School

The bottom line is that the customer pool is shrinking. While shoppers might be spending more freely, they choose convenience over specialty shopping experiences. Many customers are still choosing online retail and mass-market retailers, shifting back in favor of the one-stop-shop mentality. And that makes your dwindling pool of customers much more valuable. 

Now is the time for laser-focused, optimized customer loyalty programs to draw the big spenders back to your stores. That’s where Cardlytics can help–we specialize in providing high-quality, first-party insights to help you re-evaluate your customer experience strategy and improve customer loyalty. 

Google may have delayed the ultimate death of the cookie, but that doesn’t mean marketers can breathe easy. Brands have relied on third-party cookies for behavioral targeting and remarketing campaigns for decades. Change won’t come easy. 

There’s no plug-and-play replacement for third-party data on the horizon. Even though Google is putting the final nail in the cookie coffin, Apple and Firefox banished their use years ago. The heightened awareness around ethical data collection and privacy concerns means brands will need new ways to segment and activate their audience. 

That’s where loyalty programs come in. Strong brand loyalty programs are built on first-party customer insights, and present a wealth of opportunity to grow your data assets for targeted campaigns. If a loyalty program isn’t part of your marketing strategy today, read on to find out why it should be. 

The brave, new cookieless world

There’s no avoiding the fact that cookie deprecation will have a major impact on the way brands implement and manage marketing campaigns. Third-party cookies were the gateway to targeting consumers—observing the websites they visited, the products they bought, and even their interests and affiliations. 

They also enabled accurate campaign measurement and attribution. Brands could track conversions to a particular ad and have deep visibility into ROAS. Cookie deprecation puts an end to reliable multi-touch attribution models.

With the fall of reliable multi-touch attribution, marketers need a way to make sure they have accurate, repeatable, and affordable ways to measure the incremental impact and return of ad spend on each channel.  

Brand loyalty programs can be a treasure trove of insights

While consumers view unauthorized third-party data collection with disdain, they are typically willing to volunteer personal data for something of value. A recent YouGov poll showed that 88% of US adults would happily share personal information with brands if they received discounts, free products, or rewards in return. 

That makes brand loyalty programs the perfect vehicle to collect meaningful, and accurate, customer insights at scale as part of a value exchange. Because loyalty programs are designed to cultivate repeat customers, the insights they generate can be used to enhance personalization efforts and build a better customer experience. 

Of course, the pivot toward loyalty programs as a way to replace third-party data requires some agility in marketing tactics. The ‘awareness to conversion’ journey must be replaced by a ‘conversion to advocacy’ journey to maximize the program’s value. While a brand’s most loyal customers make up just 20 percent of its audience, they typically generate up to 80 percent of its revenue. 

Brands can use a rewards program to build a loyalty bridge that turns their best customers into advocates. A properly designed and executed loyalty program is a powerful owned-media channel that builds engagement, grows market share, and drives sales. 

Accelerating brand loyalty programs with Cardlytics 

Most brands have a good grasp of who their customers are when they’re making a purchase with them, but they lose visibility once the transaction is complete. Brands have no idea, for example, what share they’re getting of a particular customer’s category spend or just how loyal their ‘loyal’ customers really are. Without that insight, they run the risk of spending money where there is no headroom.

Because Cardlytics partners with top financial institutions, we have a “whole wallet” view of consumers, with insights into how, when, and where  they spend both in and out of the store. Armed with this first-party data, brands can deliver targeted offers to their most loyal customers, increasing their lifetime value. They can also re-engage lapsed customers with compelling offers designed to turn them into loyal fans, thus expanding market share.

It’s a win-win for brands and customers. Brands have more efficient use of ad spend with the same or better visibility into performance as third-party cookie campaigns. Customers get reward offers that make them feel valued, increasing their loyalty as a result. 

Brands with loyalty programs are a giant leap ahead when it comes to a cookieless future. That’s because responsibly managed first-party data will become the only path for brands to grow their audience, market share, and sales once the cookie crumbles.

Get in touch to learn more about how partnering with Cardlytics can turbocharge your loyalty efforts and increase sales. 

It’s the most wonderful time… to shop. With the season of giving inspiring shoppers to buy more, retailers are seeing a high volume of web traffic, spikes in sales, and some of their largest profit margins. Last year, retailers saw unprecedented growth during the holiday season. What drove that growth and how can brands shape their holiday strategy this year to capitalize on these seasonal shopping trends? Using the purchase insights we receive from 1 in every 2 card swipes in the U.S., here’s what we know... 

Capture your customer ahead of the first chill 

Every year it seems like the holidays start earlier and earlier. That’s no different this year, especially with some consumers concerned about potential supply chain-related shipping delays. One major seasonal shopping trend that we see year over year is that advertisers benefit the most by engaging with consumers early in the season. Our insights show that customers who shop earlier in the fall are 10 times more likely to return compared to the natural holiday walk-in rate. Those who engage their customers early will be rewarded with loyalty later in the season.

One-stop shops reign supreme 

Last year, mass merchandisers saw the largest spend share increase, growing +3 points from 2019, suggesting shoppers consolidated their brand shopping. This was the largest increase amongst all observed categories with mass merchandisers taking share from apparel, shoes, and health/beauty. 

The ease and convenience of buying products across multiple categories at one store is perhaps exacerbated by the pandemic’s influence on social distancing, limiting time spent in stores. As we enter the second pandemic holiday season, it’s reasonable to expect that these shopping habits will continue.  

Say... Omni! 

Consistent with what we’ve seen in other analyses, the omnichannel customer is more valuable than the single channel customer. On average during last year’s holiday season, omnichannel customers spent $1,811 while in-store customers spent $810 and online only customers spent $899. 

It should come as no surprise that omnichannel marketing has really taken off. Last year, online shoppers represented 35% of total holiday spend. With consumer spending increasingly moving online, implementing an omnichannel retail strategy should be at the top of every marketer’s to-do list.  

Open for business 24/7 

Encouraged to stay home, consumers took to ‘clicks’ instead of ‘bricks’ to satisfy their holiday shopping needs in 2020. Compared to pre-Covid behaviors, online retail is up 131% showing customers have moved online and are staying there. Growth in online spend was accelerated by increases in number of purchases rather than basket size, proving the convenience of online shopping. It’s safe to say that omnichannel retail marketing must be the new normal. Consumers can make as many purchases as they want, whenever they want, even after hours. By adopting an omnichannel retail strategy, marketers are not just getting ahead of the game, they’re meeting their customers’ expectations to be able to shop when and how they want.  

Cardlytics sees $3.6T in annual consumer spend 

Because of our view into spend, Cardlytics can deliver provable return on investment in as little as 45 days. It’s time for marketers to leverage these seasonal shopping trends so that they can drive tangible revenue. Together, we can drive holiday loyalty through repeat purchases so that your brand can drive sales, increase customer loyalty, and grow market share. Contact us today to learn more!

More than 110,000 eating and drinking establishments closed in 2020 making the restaurant industry among the hardest hit during the pandemic. And the consistent theme I heard from the restaurant marketing execs I met with during this year’s Restaurant Franchising and Innovation Summit (RFIS) was the struggle to bounce back from a major disruption. As we head into fall and continue to work in an unpredictable climate, it looks like marketers will continue to face this challenge. Enter: omnichannel restaurant marketing, a strategy that will help brands simultaneously gain new customers and grow revenue in an increasingly fragmented marketplace. 

National food spend is down. 

Cardlytics analyzed the spending habits of U.S. online shoppers to help marketers navigate the changes in consumer spend that occurred across the broader food spectrum, including restaurants, grocery, meal kit subscription, third party delivery and non-traditional gas stations that feature mini marts. We learned national food spend declining by 2.5%, which would be the equivalent of all the restaurants in NYC closing for an entire year. Despite that, there have been tremendous opportunities for growth when restaurant marketing leaders were able to successfully target new customers. In other words, the upheaval reduced spending in the category, but opened the door to gaining new, high-value customers. 

This is the advice I shared with the RFIS audience during our panel, “How to use Technology to Acquire New Customers.” 

So how can restaurants win?  

Omnichannel marketing is a customer-centric approach that delivers a consistent, personalized experience for consumers across all your brands. During the pandemic, online ordering became increasingly popular. In 2020, 26% of restaurant purchases came through online channels as compared to 13% in 2019. And we saw this behavior continue even as restaurants and grocery stores began reopening, with online restaurant spend leveling out at 28% of total restaurant spend and grocery at 14% of total grocery spend. 

Now that many people are used to ordering via apps, mobile phones, and online websites, it is likely that this behavior will continue.  

Tip: Recognizing third party delivery apps impact margins but bring in new customers, restaurants should stop worrying about the perceived risk from those platforms and focus on converting in-store only customers to omnichannel via their owned channels. 

An effective omnichannel restaurant strategy means engaging with your customers where they are and accepting that third party delivery is just another touchpoint for you to deliver a seamless experience.  

Here are a few tactics to consider: 

Convert Customers to Omnichannel: The ‘omni customer’ is dining in-store and ordering online. These omnichannel customers tend to spend more than either an in-store only customer or an online only customer, spending 3X as much as a single channel customer on average! It’s obvious that the value lies with these diners.  

More consumers than ever before have shifted their spending habits online so why not take your advertising where they're already spending?

It’s a straightforward task for most digital marketers to cookie and target online customers (at least for now) but targeting in-store only to get them to try online ordering is trickier. At Cardlytics, we help marketers do this by identifying and targeting consumers who have charged a meal in-store with a cash back offer to make a purchase online, or to purchase through a brand’s app. By reaching these single-channel customers and converting them to omni you increase their value. 

Convert Grocery Customers: Grocery has increased their prepared meal offerings, further enticing consumer groups like families, gamers, millennials, and gen z, directly competing for a household’s take out or meal delivery business. And, with grocery share of food spend higher than it was pre-pandemic it continues to be important for restaurants to target these shoppers in an effort to bring spend back.  

Online grocery shoppers are another great conversion point. In 2020, 11% of grocery purchases came through online channels vs 5% in 2019. Restaurants should target these online shoppers to convert them to online restaurant delivery. This blurs the line between in-store and online. Things like digital payments or restaurant specific apps designed to make ordering easier are all ways to entice new customers that are already using technology to purchase within this category. 

Take Share From Your Competitors: Another major struggle that I heard from marketers at RFIS is how to target truly new or lapsed customers. The Cardlytics value proposition is probably most compelling when it’s used to target customers who’ve never interacted with your brand but are regulars at your top competitors. An offer to give your brand a try, whether in-store or online can bring in new customers who are very likely to become regulars.  

If these tactics make sense, but you’re struggling to operationalize them in today’s difficult climate, you should check out this webinar with Fast Casual from Kamron Moore, Cardlytics’ Senior Director of Restaurant Partnerships, Laura Sporrer, Teriyaki Madness’ Senior Marketing Manager, and Stephanie Bauer, The Piada Group’s Director of Marketing. You’ll learn how restaurant marketers are putting these tactics to work with great results.

The pandemic forced brands to innovate at lightning speed. Consumer trends expected to manifest in years, were compressed into months or even weeks, as shoppers dramatically shifted preference to convenience and online options. Everything from grocery shopping to fitness to entertainment moved online and disruptive direct-to-consumer (DTC) brands reaped the rewards. The big question is, "How did that affect customer loyalty?"

As the country gears up for its grand re-opening, we’re seeing a sizeable, and we believe permanent, change in how people shop.

Consumers are taking their money elsewhere.

The pandemic dramatically affected businesses of all types, but its impact felt very different depending on the business model. Cardlytics’ data shows, before lockdowns began in 2020, 8% of consumer spend could be attributed to DTC brands. That share has jumped to 14% from March 2020 to March 2021.  

Rural shoppers are spending as much as their urban counterparts.

Consider this: spend on DTC brands in rural areas now matches the spend patterns of our urban centers pre-COVID.

The rural in-store shopping experience isn’t known to be rich with options. The added layer of lockdowns during the pandemic further limited entry to traditional brick and mortar retailers and gave rise to DTC brands in rural areas. While the option to buy online isn’t necessarily new, the habits of these shoppers have changed far more rapidly than expected.

There is an urgent call to action for both traditional business as well as DTC. For the traditional business, hoping things revert to “normal” is no longer a viable strategy.

The Bottom Line:

Meet the customer’s needs on their terms, it’s more important than ever. Keep an eye out for changes in purchase behavior and consider the following questions:

• Are the number of retailers in a given category that have a share of the wallet increasing or decreasing?
• How are baskets changing value, frequency, timing of purchase, and channel of purchase, especially online vs. in-store?
• What are the changes in the channels of influence when looking at incremental return channel by channel?

Remember to:

• Re-assess customer loyalty and look at share of wallet for the category rather than simply frequency or amount of spend with their store alone.
• Focus on retention. Considering all the new customer growth, DTC brands must know if they’ve kept pace with competitor growth rather than benchmarking against their own revenue.
• Understand the point of true loyalty. A customer with only one purchase is more likely to be a trialist at risk of churn.

Thanks to the pandemic-led focus on health, safety and social distancing it was easy to bring customers in, but it’s vital that they don’t fall off and revert to old spending habits.