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The New Loyalty Program: Turning Customers Into Fans

Successful retailers build one-to-one relationships with customers by knowing who they are, what they want, and where they are as they move through a transaction. The ability to understand customer data in motion — that is, while the customer is planning or considering a transaction rather than after that opportunity has passed — is the key to building ongoing customer satisfaction, retention and loyalty. 

To do this, marketers must adopt new technologies that help turn their customers into fans. They need to be able to leverage data, metrics and analytics to anticipate action, predict needs, and take advantage of every opportunity to strengthen customer relationships. The trick is to convert customers into fans by keeping them happy at every stage of the relationship, and giving them what they haven’t even thought to ask for — so you’ll never have to say goodbye again.

So how can a retailer do this? In essence, retailers must adopt a completely new kind of loyalty program that is tailored to their specific business and customer. Core to this new-generation loyalty program is a technology platform that can create an effective flow of data from multiple communication channels, point-of-sale technologies and next-generation platforms. Once retailers have the data, the next step is to unlock its value and use this to build long-term loyalty with the customer. In-memory technologies that make this all possible. By storing data in-memory versus on hard disks that are stored in some remote data center, retailers have instant access to all the data they need to move quickly and not only capture the customer first – but to also keep the customer coming back time and time again.

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These new-generation loyalty programs use more sophisticated customer segmentation and look at a much wider set of customer data and event streams than ever previously utilized for retail markets. Identifying and targeting groups of customers who share certain attributes and exhibit certain behaviors, whether in-store or online, can help create more actionable event data to mine for meaningful patterns. In fact, according to Gartner’s Consider Automating These Top 12 Marketing Processes in 2013 report, “By 2016, marketing organizations that leverage big data for micro-segmentation and targeting will achieve response rates of 70% or higher.”

A perfect example of a company leveraging these new generation loyalty programs is from the leading outdoor retailer The North Face. The company recently launched a program called VIPeak, which rewards not only purchases, but online activity such as likes or follows on social media, and offline activity such as participating in endurance challenges across the country. This led to a strong emotional connection between customers and the brand, which made customers feel empowered and engaged well beyond the purchase experience.

Retailers that take advantage of this new type of loyalty program gain more than just good feelings. For example, when the innovative, integrative pharmacy Pharmaca wanted to build a stronger connection between their retail offerings and their pharmacy offerings, they developed a loyalty program to help them deliver this engagement. Laura Coblentz, Pharmaca Vice President for Marketing and Innovation, describes the success of the first two years of the “Feel Better Rewards” loyalty program, “We saw a 50% increase in the number of customers cross-shopping retail and pharmacy, and a 10 to 15% increase in per-member spending since we launched the program.” In addition to growing the number of cross-shoppers, the program delivered significant benefits in other areas:

  • 66% of sales (dollar volume) are now on the program, as are 56% of all transactions;
  • 9.3% increase in overall sales;
  • 5.2% increase in prescription count;
  • 36% of the members are earning rewards; and
  • 39% of earning members are redeeming rewards.

These results would not have been possible without the sophisticated in-memory analytics engine that Pharmaca deployed to better understand their customer’s behaviors, motivations and purchases — and to turn that understanding into actionable program strategies. The investment they made in identifying customers who might become cross-shoppers, creating incentives for them to do so, and reinforcing that behavior continues to pay off for Pharmaca.

As technology collapses the barriers between communication and sales channels, connects customer communities (satisfied or otherwise), and enables entirely new kinds of transactions, retailers must operate at speeds faster than traditional data stores can manage. Using in-memory technologies to handle complex event processing and sophisticated analytics allows retailers to qualify and award offers, earn and redeem points, and connect customer service processes to customer loyalty programs.

It has never been easier for a customer to abandon a transaction and complete that purchase elsewhere — what once would have required a frustrating drive across town is now just a few clicks on a mobile device. As retail technologies continue to evolve, retaining and satisfying customers means anticipating customer actions, predicting customer needs, taking advantage of every opportunity to strengthen your bond and creating fans for life.


Matt Quinn has been with TIBCO for 14 years. During this time he has had several worldwide roles. As CTO, Quinn works with all product groups to create a common, corporate-wide vision for all of TIBCO’s products and technologies; ensures interoperability between TIBCO’s various products families, as well as consistent architectural approaches across all groups; and provides overall leadership and coordination of TIBCO’s product plans and technology direction.  Up until his new role as CTO, Quinn has been responsible for the Composite Application Group (CAG). This group encompasses TIBCO’s SOA, BPM, Infrastructure, Monitoring and Management, Governance and User Experience technologies. This group is responsible end-to-end for the engineering, quality, delivery of product, product vision, and customer enablement. Earlier in his TIBCO career, Quinn was a global architect, responsible for the delivery of some of TIBCO’s largest implementations in diverse areas such as transportation and logistics, energy and finance. This was a hands-on role, building real systems architecture for production customers.

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