Data Segmentation Boosts Loyalty Success

Convenience Store Decisions – Analyzing customer data takes loyalty programs to a new level of personalization. Despite news of the recent Facebook data breach and other high-profile misuses, data is not something to be feared. It is something to be captured and used in a way that benefits both c-stores and the customers they enroll in loyalty programs.

“Analyzing customer data is the key to measuring the effectiveness of a loyalty program,” said Perry Kramer, senior vice president and practice lead at retail consulting firm BRP.  “In the last couple of years, there has been an increased willingness from consumers to provide their data as part of the enrollment process, as long as they perceive a value or reward for providing the data.” That reward goes beyond five cents off gas or a free soda.

“Data segmentation enables retailers to divide their customer base into groupings for data analysis and marketing campaigns,” Kramer said. “The most effective grouping of segments will vary across retailer types. If you are a c-store that sells pizzas or fresh food, it will differ from a c-store that has made-to-order breakfast offerings and from another that has a large beer cooler.”

Kramer recommends 10 or fewer data segments, focused on key store areas and purchase history.

“Understand and continually refine the segments to tailor the value proposition to maximize enrollment and active users,” Kramer said. “Smart marketers will build customized marketing campaigns by store, region or customer demographic, which enables retailers to spend marketing and margin dollars where they are most effective instead of spreading them across the entire customer base.”

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