August 30, 2023
NORA Podcast: Cracking the Code to Customer Loyalty and Personalization
Can you believe it's been more than a month since Online Retailer Sydney? The good news is, the insights are still rolling in!
I had the exciting opportunity to tune into a special podcast episode recorded by the National Online Retailers Association on day two of the conference. It featured a conversation with Ecom Nation Founders and NORA Advisory Board Members, Mal Chia and Paul Waddy, with guests Airi Sutherland, Global GM Online at Ksubi, and Simon Burrett, former GM at Harris Scarfe. The central theme revolved around strategies to foster and maintain customer loyalty and retention.
Creating personalized customer journeys at scale is the holy grail for modern businesses and driving customer loyalty and retention in retail is a strategic approach that benefits both the business and its customers. It goes beyond short-term gains and focuses on cultivating strong, mutually beneficial relationships that can sustain and grow retail businesses over time. Both Airi and Simon shared their secrets to building lasting customer loyalty and suggested Lexer as a pivotal tool in this process.
For those who missed it, here are some of the practical strategies they shared:
Establish a Robust Segmentation Framework
One fundamental strategy emphasized was the importance of segmentation. Without a robust segmentation framework, achieving personalized customer journeys is nearly impossible.
At Ksubi, they've transitioned from a batch-and-blast approach to a one-to-one personalization model. Their segmentation framework relies on key data points: customer recency, frequency, price sensitivity, and product preferences. By blending first, second, and third-party data, they ensure a comprehensive view of each customer.
During the session, Lexer was recognized as a powerful tool in achieving personalization. Its user-friendly Customer Data Platform (CDP) has helped empower teams to extract meaningful insights. From building dynamic segments to conducting propensity modeling, Lexer has aided in creating personalized experiences that resonate with customers.
“The thing I love about Lexer is that we are able to build out that segmentation framework in Lexer and this is incredibly straightforward. You can have it dynamic so that as your spend threshold changes it will dynamically adjust. And you can also automate the feedback loop between your email marketing platform, your Facebook, your Meta for your performance marketing ad.” - Airi Sutherland, Global GM Online at Ksubi.
Propensity Modeling: Predicting Future Behavior
Propensity modeling, which involves using AI to predict customer behavior, was also discussed. Airi highlighted that while segmentation creates the foundation for personalization, predictive analytics takes it to the next level. It enables retailers to anticipate customer preferences and needs, allowing for hyper-personalized experiences. Such advanced models require a well-structured CDP that can handle complex data analysis.
Tailor Loyalty Programs to Your Customers
Building a loyalty program that resonates with your brand and customers is vital. The speakers highlighted how different brands require distinct loyalty approaches. For instance, while brands like McDonald's thrive on price-based loyalty strategies, more premium brands like Ksubi focus on offering unique, non-monetary value propositions. Ksubi's loyalty efforts include exclusive access to events and customizations, aligning with their fashion-forward and community-driven ethos.
The Role of Omnichannel and Unified Commerce
In the current omnichannel retail landscape, customers have developed a strong propensity for a seamless unified commerce experience and catering to this expectation is paramount. This requires a high level of connectivity, especially for those VIP customers who seek consistency between in-store and online interactions.
By blurring the line between online and offline, retailers can offer maximum value to their customers, resulting in potential revenue growth. This requires breaking down the silos between different departments, as well as utilizing technologies like CDPs to create a unified view of each customer.
“What Lexer is working on at the moment in the clienteling space is fantastic, because it actually allows that point of sale integration so that your in-store team has just as much visibility over the customer’s individual purchase history as your online team would. Then, it’s an educational piece for the team to go, hey you are obviously ranked on performance and sales value - this is a key tool to allow you to drive a higher average value.” - Airi Sutherland, Global GM Online at Ksubi.
Read more about Lexer Serve - the first CDP-powered clienteling tool that turns data from all customer touch points into exceptional in-store experiences.
Understanding Customer Behavior
To truly personalize customer journeys, understanding customer behavior is crucial. Harris Scarfe's approach exemplifies this.
Harris Scarfe is a multi-category retailer who shifted from a strategy of continuous email broadcasts to a more refined approach. Previously, they sent out 18 weekly emails to their database and their segmentation strategy aimed to cultivate loyalty and resonance with customers gradually.
Simon suggested, at Harris Scarfe, purchase history holds less sway over future orders. For instance, someone purchasing a cookset is unlikely to do so again soon. When they adopted Lexer, their goal was to focus less on purchase history and more on understanding customer engagement and pinpoint customers who showed interest in their ambassador content, celebrity features, participation in events like the Good Food and Wine Show, engagement on social media, and on-site interactions.
Their objective was to establish a highly relevant connection with this audience and this deeper understanding allowed them to craft personalized customer experiences, going beyond the frequency-based models.
Start with Strategy
Cracking the code to customer loyalty and personalization doesn't happen in isolation. A clear business strategy is paramount. Define what you want to be known for and the promise you can deliver. Align teams and tools, and use a stimulus-response approach to fine-tune your customer interactions based on real-time feedback. It is also important to continue to learn and adapt to ensure businesses can build the loyalty and trust that sets them apart in today's competitive landscape.
Listen to the full episode below:
Know your customer, grow your business
Great brands are built on great customer experiences. Lexer is the CDXP of choice for over 150 leading brands and retailers, such as Sur La Table, Martha Stewart, Cotton On, John Varvatos and more. We transform disconnected data into actionable insights and provide the workflow tools to automate and optimize the customer experiences that drive sales.
Lexer's CDXP can help your brand unify siloed, scattered, and speculative customer data into enriched and complete customer profiling, transforming your business to customer first.