Every CPG (Consumer Packaged Goods) brand should invest in a loyalty solution. D2C programs and other loyalty solutions are critical for CPG brands to gain and retain customers. Understanding and leveraging insights from loyalty data allows brands to adapt and thrive in the dynamic CPG and retail marketplace.
This article discusses proven customer loyalty strategies and best practices for CPG brands. CPG brands can stay ahead of the curve by adopting the strategies and best practices below.
CPG Loyalty Marketing Strategies
Dynamic Personalization
CPG-branded loyalty programs should be dynamic to deliver unique rewards and experiences that align with customer preferences. When used effectively, creating a personalized loyalty customer experience (CX) captures customer attention and builds emotional brand loyalty.
Even simple personalization strategies can make customers feel appreciated and build emotional loyalty between customers and CPG brands. Birthday rewards are a simple and effective personalization tactic. Brands can use birthday rewards to enhance the customer experience (CX)/loyalty member experience (MX).
AI-driven hyper-personalization is the latest evolution of personalization strategies. Hyper-personalization involves leveraging AI technologies and customer data to create an enhanced, individualized customer experience.
Data Analytics & Insights
Brands can use customer data to personalize customer experiences and provide users with relevant content. Every CPG brand should analyze customer data to understand their customer’s preferences and buying patterns.
A McKinsey survey shows successful CPG firms analyze customer/user data and purchasing behavior to deliver more personalized experiences to their loyalty members. The following are examples of the most common/beneficial loyalty member data that CPG brands can analyze and gain insights from:
- Transactional Data: purchase history, total customer spend, average spend per purchase, refund & return rate, abandoned cart rate, etc.
- Engagement Data: website & app activity, email open & click-through rates (CTRs), social media engagement, customer service interactions, etc.
- Demographic Data: age/gender, purchase location, lifestyle & interests, etc.
- Behavioral Data: website & app user paths, product views & clicks, user search queries, etc.
- Direct Customer Feedback: Brierley Loyalty Quotient (BLQ), Net Promoter Score (NPS), open-ended feedback, social media conversations, etc.
CPG businesses can gain valuable insights from this data that can be used to improve their loyalty program and marketing messaging, optimize personalized customer experiences, and drive growth and retention.
Exclusive Access & Benefits
CPG brands can enhance their loyalty solutions by offering program members exclusive access to content, offers, and discounts. Loyalty solutions that provide exclusive benefits to loyalty members can set brands apart from competitors. Experiences not available to the general public make loyalty add value to the loyalty program and make members feel valued.
Exclusive content, discounts, etc., can build emotional loyalty with loyalty program members by making them feel seen and valued. Customers and loyalty program members who feel strong emotional loyalty can become brand advocates, increasing loyalty program members even further.
Social Media & Influencer Marketing
Influence on social media helps shape consumer preferences, especially with the advent of influencer marketing in the CPG industry. An Influencer Marketing Hub survey shows that approximately 90 percent of consumers find influencer marketing effective. Leveraging influencers who align with the brand’s image and values can significantly amplify the company’s customer reach.
Social media company accounts are vital for CPG brands to broadcast their values and receive customer feedback. Influencer marketing and social media engagement can generate customer loyalty with interactive and customer-centric communication.
Tiered Reward Systems
Brands can utilize tiered reward systems in their loyalty programs to incentivize customer engagement. Brands can leverage loyalty tiers with increasingly better rewards, benefits, etc., an excellent tactic to influence customer behavior, including improved user engagement, increased spending, repeat purchases, etc.
Tiered loyalty strategies are an excellent example of how CPG brands can add gamification to the loyalty experience, making the loyalty solution more engaging and interactive. By providing a challenge to reach higher tiers, brands incentivize customers to increase engagement, spending, etc. When loyalty programs recognize achievements like reaching new tiers, members are incentivized to participate even further (a phenomenon known as the ‘Endowed Progress Effect’).
Regular Refinement
CPG brands must monitor customer or user behavior to keep their loyalty programs relevant, dynamic, and adaptive. Loyalty programs should evolve as market and consumer preferences evolve. CPG brands should audit their loyalty strategies regularly to ensure their loyalty solution remains effective and engaging.
Brands should frequently refresh content to keep it relevant to their audience. CPG marketers should monitor consumer behavior and preferences and use insights from the data to refine and optimize their loyalty solutions regularly.
CPG Loyalty Best Practices
Brands must follow these best practices to implement their CPG loyalty solution effectively. The following are loyalty marketing best practices for the consumer packaged goods industry:
- Seamless User Experience (UX): Joining and participating in loyalty programs should be easy and hassle-free. Complicated processes can deter potential members.
- Clear Communication: Brands must communicate the benefits and workings of the loyalty program. Misunderstanding can lead to dissatisfaction and disengagement.
- Regular Evaluation: CPG businesses should track the performance of their loyalty program using metrics like member acquisition, engagement rates, and redemption patterns.
- Customer Feedback: Brands should leverage customer feedback to improve the program and make customers feel valued and heard.
- Data Security: In a Deloitte survey, only 38% of companies were confident they knew where their customer data is stored. Given the sensitive nature of customer data involved, CPG loyalty programs should prioritize data security and consumer privacy.
These best practices ensure that CPG loyalty programs are effective and sustainable. Brands must continually refine their loyalty solutions to meet the changing needs of their customers and stay ahead of market trends.
Contact CPG Loyalty Experts!
Capillary Technologies’ loyalty platform is unrivaled in its flexibility and user-friendliness, making it easier than ever for CPG brands to offer a D2C loyalty program to customers. Capillary even offers a CPG suite of loyalty solutions that address key pain points for CPG brands. If you are a CPG brand decision-maker, contact Capillary today to learn more about Capillary’s suite of CPG-specific loyalty products.
Consumer Packaged Goods loyalty programs can also take advantage of the loyalty consultation services from Brierley, a Capillary Company, offers expert, actionable consultation for loyalty programs in the consumer packaged goods industry.
Contact Brierley’s experienced CPG loyalty analysts and strategists for an expert consultation! Brierley pioneered the modern loyalty industry, and with over three decades of experience, our experts can provide data-driven, actionable insights and advice to optimize CPG loyalty programs and maximize loyalty marketing ROI.