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Invest in Loyalty Programs to Capture First-Party Data

There’s no question that digital marketing disruption is here. To help you navigate, Material collaborated on a five-part series that tackles the biggest challenges you’ll face during the coming months and years. The first installation explores why first-party data is now king, and how brands can harness it to reach and engage customers in a post-cookie world.

Marketers and media buyers alike are understandably feeling anxious as Google moves forward with its plan to phase out support for third-party cookie tracking tools in its Chrome browser within the next two years. In essence, invaluable third-party data is being snatched away, the legacy of legislation to protect consumer data.

The good news: your first-party data is not going anywhere – and in the post-GDPR and CCPA era, it’s more valuable than ever. It’s crucial for marketers to focus on this lower funnel first-party data, to better understand how your customers behave, so you can optimize opportunities for retaining, upselling and cross-selling. 

Fortunately, there are some straightforward ways to do this.

Survival tactic: Implement first-party pixels

Brands take note: if you haven’t already, now is the time to add first-party pixels to your site. Adding a simple piece of code to your website such as the Facebook pixel can prove invaluable. First-party pixels implemented across your website, mobile apps, etc., provide insights on what your customers are really interested in, measure cross-device conversions, help you better understand your customers based on past purchases, and ensure your ads are seen by the most relevant custom audience segments. 

Survival tactic: Expand First-party data sources with loyalty programs

Your first-party data sources, however, aren’t unlimited. Your website(s), mobile app(s), CRM, are important platforms to capture information, but you should consider widening the net by implementing purchase/loyalty programs. Material is confident there will be a substantial investment into first-party data operations across the industry, especially in programmatic and automated buying environments.

Loyalty programs are a transparent two-way street: consumers willingly offer their data in exchange for a reward from the brand. That data helps brands better understand their consumers and offer personalized experiences and communications that lead to increased sales and retention. It’s a win-win for all parties. 

Loyalty program case studies

Material has helped some of the world’s leading brands develop, launch and optimize modern loyalty programs – one of the most effective strategies brands can use to navigate the third-party cookie apocalypse.

Pizza Hut’s Modern Loyalty Program

Many restaurants rely on outdated loyalty programs, but Material’s Modern Loyalty program prioritizes the customer experience with flexible tech platforms. When Pizza Hut wanted to win back customers and stand out in an increasingly competitive marketplace, Material revamped the brand’s loyalty program with dramatic results: Pizza Hut increased sales from -4% in 2017 to +2% in 2018, reversing six consecutive quarters of sales decline. To help the brand achieve such a delicious turnaround, Material moved fast, transitioning Pizza Hut’s email subscribers into a Modern Loyalty program in six months, designing a scalable solution, and crafting the perfect messaging for each point in the customer lifecycle.

Optimizing Sephora’s Loyalty Program

When Sephora wanted to better understand the nuances of its loyalty program, already one of the best in the business, the company turned to Material for advice. Material helped Sephora improve its loyalty program by exploring how the brand could provide more value and optimize rewards tiers to encourage customers to spend. How? We designed a custom Rewards Simulator that enabled Sephora to use first-party consumer data to evaluate existing and potential rewards combinations. 

Bonus benefits of Loyalty Programs

The potential benefits of a loyalty program extend way beyond capturing first-party data. We’ve helped many other companies earn customer loyalty with a range of methodologies and strategies. 

When REI needed to figure out how to gain millennial brand loyalty, for example, we went camping. When Reliant Energy, one of the largest Texas electricity providers, needed to earn loyalty in a competitive market, Material created an innovative app that helped Reliant’s customers control their energy use and enjoy a simplified billing process. Material also helped Reliant build engaged audiences from loyalty data, delivering tailored messaging across social platforms based on app usage. The result? Reliant saw dramatically increased customer loyalty and became the 2nd highest retentive service.

To conclude: in the post-cookie era, brands that pixel their sites and invest in loyalty programs will find it much easier to wean themselves off third-party data. Material is here to help clients develop, launch and optimize loyalty programs to incentivize the collection of first-party data and thrive during disruption.

About the Author

Material is a modern marketing services company powered by sophisticated analytics, deep human understanding, and design thinking.