Email Marketing’s Next Secret Weapon: Loyalty Programs
10 years ago, a former boss of mine, who I greatly respect to this day, and I were discussing in which direction I should take my career. He was strongly of the opinion that the brightest future lay in adtech, and that martech, and email marketing specifically, was becoming passe. In his opinion, if I wanted to be where the action was going to be happening, then I had to get into adtech.
Boy, am I glad that for once I didn’t take his advice!
Fast-forward to today and we see an adtech space that is struggling to come to terms with ever increasing laws around data privacy, and the impending death of cookies and third-party data. And martech is booming like never before, both in response to the growing problems in the adtech space and as a result of the increasing perceived value of leveraging first and zero party data in the martech—and particularly email marketing—world.
First, a couple of definitions (courtesy of Danny O’Reilly’s blog at Cheetah Digital):
First-party data is typically collected during sales or form completes and can include things like past purchases, mailing address, and date of birth. All of this is valuable information, but data related to purchase history can’t tell you anything about purchase intent.
First-party data acquisition is an important arrow in the marketer’s quiver. However, things like interests and future purchasing intentions still must be inferred from past buys — implicit data rather than explicit.
It is possible for marketers to know what customers intend to do or buy in the future by collecting data that is intentionally and proactively shared directly by the consumer. This is called zero-party data.
Marketers collect this data by connecting directly with consumers. Rather than making inferences and assumptions, you simply ask!
The beauty of both types of data is that they can be leveraged very effectively in your email marketing campaigns, and neither type is under any kind of scrutiny from those government agencies concerned with data privacy (unless your company is prone to sharing its first and zero-party data with other companies). Obtaining first-party data on your email subscribers is a fairly simple task of collecting and storing their interactions with your company via website behavior, purchases, email engagement, and so on.
Obtaining zero-party data is not quite as simple. Since it’s things your customer/subscriber actually tells you, most of the time you’re going to need to provide them something of value in exchange for that information. Sure, you can get some of it from a preference center. Where else? Let’s face it, how many of your subscribers bothered to answer your last “tell us how we did” email, unless it was to express extreme displeasure with something you did or didn’t do.
Which brings me to my point. Loyalty programs provide a treasure trove of zero-party data (and, of course, first-party data). They are one of the best ways to collect zero-party data because most loyalty programs can clearly demonstrate to members the value of the relationship. It’s a value exchange: I give you information, you reward me.
There are basically two types of loyalty programs:
- Those with whom you have to stay in the relationship
- Those with whom you want to stay in the relationship
An example of the first type is a grocery store rewards program. You freely exchange information with them in order to get coupons, special offers, and discounts based on spending volume. If you leave the loyalty program, the discounts stop. However, this type of loyalty can be easily subverted by another grocery chain upping the ante and offering more coupons, bigger rewards and steeper discounts.
An example of the second type is an airline rewards program. Not only do you earn rewards to apply against future travel, but you also get tiered levels of service based on attaining certain goals. And giving up that higher level of service isn’t something most of us want to do. We like free upgrades and premium seating, and don’t want to start at the bottom of another airline’s program. It’s a real partnership between loyalty program member and provider.
From its earliest days, email has played a large role in the ongoing communication and delivery of loyalty program benefits and rewards. And email campaigns quickly became an essential piece in loyalty program management. Here’s just a short list of the types of emails loyalty program members might receive:
- Point totals
- Special offers and coupons
- Partner specials and deals
- Update your preferences
Despite this enormous synergy, email marketing and loyalty marketing have remained distinctly different parts of the organization. And the relationship between them has mainly been one way—email marketing has been used to help the loyalty program. But in an era where, as I said earlier, first and zero-party data are rising in importance for marketers, perhaps is time for the email marketing team to ask “how can the loyalty program benefit my email marketing?”
What I mean by that is this—how can the email marketing team use the loyalty program make its entire email program more effective? Some of the questions to ask:
- Is the current loyalty program fully leveraging email marketing to engage with its members?
- Is the loyalty program gathering the right data about its members? Is it asking the right questions?
- Does the loyalty program database contain data that could be leveraged by the email marketing team?
- How can the email team turn subscribers into loyalty program members (and thus help themselves to more zero-party data!)?
- How can I use email to help create a more of a “want to stay in the relationship” loyalty program?
Of course, if your company doesn’t have an existing loyalty program, the first question to be asked should probably be, “Why don’t we have a loyalty program?!”
Finally, in an era of increasing platform overlap in the martech world (ESP, CDP, DMP, CRM), and the risk of “over-platforming” in your martech stack, pure-play loyalty providers and email platforms complement each other without overlap.
So email marketers, it’s time you get closer to your loyalty team and start asking some of the questions posed above.
You just might find it a very “rewarding” experience….
Chris will be leading a discussion on this topic at the Only Influencers Members-only Zoom Call on Thursday, August 19, 2021. If you're an OI member, watch the discussion list for the link. Not an OI member but interested in joining us? Reach out to Jeanne Jennings to see about getting a guest pass.