Five Strategies For Cross-Channel Loyalty

By Chris Cunnane, Research Analyst, Retail, Hospitality, and Banking, Aberdeen

Before retailers can fully appreciate the power of a cross-channel loyalty platform, they must prepare by ensuring the infrastructure is in place. To that end, the back-end and front-end technologies deployed by retailers must talk to each other across all channels. Many retailers have integrated these technologies within one channel or another, whether it is the store environment, online, or call center. Once this has been established, the loyalty program will be able to function across channels.

For retailers that are re-thinking, re-launching, or just entering the cross-channel loyalty space, the following are Aberdeen's recommendations:

• Adopt change management requirements for cross-channel loyalty integration. According to Aberdeen's November 2010 The Roadmap from Multi-Channel to Cross-Channel Retailing research report, 74% of the multi-channel retail operations are characterized by separate and siloed channels, resulting in non-uniform loyalty offerings across these channels. When cross-channel loyalty is introduced in any retail organization, change management ensures that standardized methods and procedures are used across channels for efficient and prompt handling of all changes to the IT infrastructure due to market demand, new channel adoption, or regulatory issues. Retailers can ensure standardized methods for all changes and any proposed change must be approved in the chain management process, balancing the need for change and the potential negative impact of change.
• Implement a centralized cross-channel customer loyalty platform. The centralized loyalty platform incorporates consumer insights, offer creation, redemption, and performance metrics into a single repository, allowing retailers easy access to all loyalty related data. Currently, only 24% of retailers have implemented this platform. The remaining 76% of retailers without a centralized loyalty platform are missing out on opportunities to streamline the loyalty process, from offer creation to redemption tracking, and are unable to react quickly to a failing campaign. As referenced earlier in this research report, retailers utilizing a cross-channel loyalty platform have seen a 20% increase in customer retention rates (compared to 8% for all others) and 15% increase in customer re-activations rates (compared to 4% for all others).