Loylogic

Why aren’t loyalty program emails personalized and what you can do about it

Zurich, Switzerland | 02nd April 2020

By Lansy Joseph, Chief Innovation Officer, Loylogic

When was the last time you received an email from an online store that wasn’t personalized to your interests? Years ago, I would imagine. When was the last time you received an email from a loyalty program that wasn’t personalized though? Well, I can say for myself – just last week.

To clarify, by personalization I’m not referring to the basics like having your name, account number or points balance in an email. I’m referring to personalized content relevant to your profile (e.g.: gender, points balance, location, etc.), preferences and interests based on your past browsing and shopping data. Article image 1

Why would this be the case in this era of hyper-personalization?

While eCommerce stores and their associated marketing communications are typically run by teams within the same organization, this may not always be the case with loyalty programs. Often reward stores, online shopping malls, and other accrual, redemption and service offerings are run by program partners.

In the case of eCommerce, one could integrate their backend or personalization system with their email service provider and that is all it would take to deliver personalized email content. However, given the breadth of partners participating in a loyalty program, it would require as many integrations as there are partners to offer an equally personalized experience.

So how do programs work around these challenges?

Programs often choose to either just feature static banners in their emails or painstakingly hand-pick few rewards per segment.

While static banners are easy to achieve, they end up featuring irrelevant content for the majority of the audience. Over time, this would reflect in lower open rates and eventually opt-outs.

In the case of manual curation, creating enough segments to achieve a personalized experience for each member is unrealistic. Furthermore, there is a significant overhead for the program’s digital marketing team to co-ordinate content curation with their reward store partner (as well as other content partners) each time a marketing communication is being prepared. Therefore, it is safe to assume that only a handful of segments would be created - probably one per key country and one for the rest of the world, in some cases further segmented by program tier and/or points balance.

Consider a hypothetical global program with 5 key markets, 3 classical tiers and 5 points balance bands.  That would be 75 segments and 300 rewards that would have to be hand-picked assuming just 4 rewards are featured per email communication. And that’s just for rewards content!

A similar volume of content would need to be curated for shopping partners and other services that may also be featured in this marketing email. Easy to see that’s an overwhelming volume of content that needs to be manually curated, and it doesn’t end there. You also need to ensure that the featured content remains available and doesn’t change in price for up to a week once the email is sent out.

Does all this effort eventually pay off?

Not really, unfortunately. Why? Because each of the program’s members is treated the same as, on average, 65,000 others, assuming a program with 5 million members. While the content is now more personalized than with just static banner ads, it is still far from what users expect these days. The unfortunate results are lower click-throughs and conversions, as well as a very disappointing return on the effort put in.

What would a loyalty digital marketer dream of instead?

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If a program could just send the same email to all its members with each member seeing content that is personalized to their profile, preferences and interests when they open it. Wouldn’t that be great?

So, what should the perfect solution offer to make this dream come true?

Here are the 5 most important aspects to consider:

  • Technical Integrations: It should be a plug-and-play solution that presents 1:1 personalized content when the email is opened, independent of the email service provider used to send out the emails.
  • Efficiency: Content recommendations should be computed only for those emails that are opened, which typically is only around 20-30% of the overall mailer audience, making it up to 80% more efficient compared to Send Time Personalization.
  • Dynamic Personalization: There should be a ready-to-use library of personalized strategies, ensuring relevant content for each of your members without having to actively manage each campaign.
  • Multi-Content & Multi-Channel: The ideal solution allows a range of content - rewards, online shopping partners, mileage service offers, etc., across several channels - web applications, native apps, email, app push messages, social messenger notifications, etc.
  • GDPR Compliance: Last but definitely not the least by any means, 100% GDPR compliance is an absolute must.

Solution

Loylogic’s Innovation Lab has developed Open Time Content Personalization which offers a scalable, efficient and multi-channel solution to personalized loyalty eCommerce content marketing.

Interested in using it to increase relevance of your program communication, member engagement and program revenue? Write to us at innovation-lab@loylogic.com.