On the face of it, a sophisticated loyalty card scheme, such as Tesco Clubcard, only really benefits the consumer by offering price advantages. For those that take a little time to consider and use the vouchers that means money off. Well we all like that.
However, I wonder whether there are more benefits such as being prompted to buy products that you forgot last week, or even new products that you had never considered using before. There is an added benefit of relevance that we often disregard but still matters. Indeed it could matter more than price.
Let’s take a fictional Susie shopper. One week, she buys Arial powder for the washing machine and a bottle of Sunsilk shampoo. She uses her loyalty card so Tesco, or another supermarket knows what she has bought.
Overnight, the data analysis engines run and they find that there are “holes in her basket” – products she didn’t buy. These holes represent upselling opportunities for the retailer. So, in her next batch of vouchers, she is offered £1 off Sunsilk’s conditioner and 50p off a bottle of Comfort to improve the softness of her clothes wash. Susie then uses her vouchers and buys these companion products and, low and behold, her hair is shinier and her clothes are softer.
The retailer might argue, fairly reasonably, that these tangible benefits have improved her standard of living above that of her friends. Lots of tangible benefits together can improve ones quality of life – she feels happier, cleaner, more beautiful and so on.
The new opportunity for online marketers is to combine point-of-sales information (perhaps via e-commerce) with social data and social advertising from sites such as Facebook, to deliver a similar opportunity for consumers, only online.
There is of course a privacy argument and such schemes should always be on an “opt-in” basis but for those that do, there is the added advantage of having relevant adverts served, at the right time, at the right price, for products and services we might actually want.
To see this in action we only need to look to the online games companies. In games such as Farmville it’s standard practice to understand the current status of a player (whether they have a barn or not for example), what they are trying to achieve (trying to get to the next level) and to make them an offer so they can short cut by paying a small fee (£2 to upgrade to a barn and make it to level 6).
The games companies can achieve this because they control everything – the status, the objectives and the marketplace (not to mention the currency and prices…). For ordinary companies they may only see one piece of the puzzle which is why Social data becomes so important.
Using, on an opt in basis, social data from sites such as Facebook, combined with activity data from platforms such as Syncapse Platform, we can start to build a picture of our customer and make them advertising offers entirely relevant to them individually – “you just got engaged? I see you’ve been looking at our Maldives pages? Here’s ten reasons why you should choose the Maldives and a great offer on our honeymoon packages”. Or perhaps we want to prevent customer churn – “I see you’ve been buying pet food from us but you’ve just become a fan of our competitor store – what have we done? Here’s some vouchers to lure you back!”
Yes it does get creepy. Yes it requires significant privacy controls in place throughout the digital experience – but it provides an a new way to reach consumers for marketers and for consumers it might just bring the benefits of loyalty cards to other places in the market. What do you think? Creepy or Convenient?
Now for me, I’ve just organized a dinner party on Facebook, who is offering me my money off wine vouchers…!