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Beth Schultz

Color Me Stupid About Customer Loyalty

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Apollo
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Prospector
confusion -loyalty cards vs loyalty value
Apollo   9/24/2013 9:14:24 PM
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I specialize in Business Analytics with an enphasis on decision support systems to create or tighten corporate strategy.

My comment may have been addressed though I want to make the topic clear from an analytics point of view.

I often encounter conversations relating transactional data to "loyalty" cards. Tracking transactions via a card with a unique ID is technically not a means to track loyalty. This method tracks product purchase patterns to create up/cross sells programs via market basket analyses. As well as potentially helps calculate the customer life cycle and purchase pattern cycles. Bottom line I beleive the name of the card has been misleading, it's not a loyalty card, it's more of a tracking device to better serve the customers purchase pattern.

My point is a Loyalty measurement and category assignment has been known to created more operational improvements and product selection to give the customer the option to become loyal.

Most of the information to measure loyalty is obtained from the shopper and customers. Either face-to-face or phone interviews, email surveys, custome panels,, etc. The voice of the customer VOC is the optimal metric.

The VOC to capture ranges from satisfaction, refferal, and most important the level of expectation vs. performance of the major facets for your business. Let's say we include store associate professionalism/attire, cleanliness of store, hours of operation, parking lot lighting, changing product tags during the mid-day of the last day of the promotion, associate product knowledge, out of stock, display presentation, manager response time, etc.

It appears this method may not apply to some retail but mainly should apply to most. And it also depends on executive support, resources, and budget.

After the VOC is gathered then metrics are calculated to identify the customers in the 3 buckets; advocacy (finds a particular specialty and shouts to the world), cognitive (particluar with product details and pricing, out of stock, really does the research), and overall retention (customer for convenience, and may or may not have a choice where to shop, or just feels comfortable and will not shop despite coupons from competitors).

The analysis will identify most important facet of the business that would address lower cost or an increase revenue. Affected areas can be operations/marketing/advertising/merchandising.

My opinion about retail preference pertains to the loyalty measurement, and really want to voice my opinion that the "loyalty card" does not always promote loyalty and may lead to picking lower margin products.

 

Here is a process that a shopper/customer probably follows:

Interest in a product

Perception

Intention

Expectation

Experience

Performance

Assessment

Satisfaction

Zero-Tolerance

and 3 degrees of Loyalty is created to identify categories for

Cognitive,

Advocacy, and

Retention cusomters.

I did enjoy the time,

Ken

http://www.linkedin.com/in/kennethrkrawczyk

Michael Steinhart
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Blogger
Re: Birthday
Michael Steinhart   9/24/2013 5:29:30 PM
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I agree with you, BethK. Sending you a birthday card is one way to increase affinity. But they probably are using more sophisticated data-mining tools to get at your birth year, too, and there's not much you can do about it. Are there other companies that specifically don't?

David Loshin
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Blogger
Customer Loyalty
David Loshin   9/24/2013 5:15:52 PM
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Of course, with your name and the state where you live, they can match you against databses like the ones used by data list companies (you know who they are) and easily match the month and date to get the year. But of course the clerk does not really care - she is only incentivized to ask for the data.

Nonetheless, what is the price at which you are willing to sell your private data? Recently my 15-yr old was enticed to fill out a form at a donut shop offering a free donut in return for joining the email fan club. I told her that her private email address was worth more than just a donut.

BethSchultz
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Blogger
Re: null values are still information
BethSchultz   9/24/2013 4:21:45 PM
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Thanks Pierre, but I don't want to be taking credit for the journey bit. I like that description too, and we have to give credit where it's due... which is with Wilson Raj.

BethSchultz
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Blogger
Re: Birthday
BethSchultz   9/24/2013 1:50:20 PM
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I'll be waiting!

Pierre DeBois
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Blogger
Re: null values are still information
Pierre DeBois   9/24/2013 1:46:07 PM
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I like Beth's wording about the customer journey, and how their perception of a data request is related to their journey.  People certainly don't mind someone knowing their age if the information makes sense (the right Robotussin - adult vs kids, for example) and if the agent asking for the information can be trusted.  That last part plays a role in customer service success. Beth highlights yet another factor in how data becomes a big data factor. 

BethK
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Prospector
Birthday
BethK   9/24/2013 1:34:07 PM
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While the retailier would love as much personal information as you are willing to provide, my guess is your birth month and day will be used to email a discount coupon to you on your birthday next year. Happy Day!

GlennStrycker
User Rank
Prospector
null values are still information
GlennStrycker   9/24/2013 1:25:41 PM
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Even if the company truly respects your wishes to not give your birth year (and they don't use the additional information you gave to look it up), even having a null value can be used predictively.  By not giving your age, you are in a highly biased sample segment, and this alone can be used predictively.

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