Three Reasons Why CPG Loyalty Will Dominate This Year
The Consumer Packaged Goods (CPG) industry is massive. In the year 2016, the CPG sales revenue has clocked about 769.7 billion US dollars in US alone. The conventional and the traditional methods that long guided the CPG industry are swiftly falling to the wayside. Consumer shopping behavior and spending habits have likewise undergone immense transformation. Undoubtedly, loyalty strategies in the CPG sector have transformed the industry and continue to evolve into 2017. Let’s take a look at the three key factors that will shape the blossoming category of CPG loyalty programs.
- Data Gathering
- To devise and initiate any loyalty program or CRM tools, it is essential to accumulate and store consumer purchase data, design a value proposition and maintain a continuous dialogue with your customers. CPG brands generally rely on their partners for the distribution, such as retailers. This makes it difficult to tap the data of each individual shopper through POS systems. It is only a remote possibility that the card issuers and retailers will hand over the data to CPG firms.
Despite intimidating challenges, there are some novel to solve this problem. We recommend that your loyalty provider to build a solution where purchase validation happens via receipt processing. The data can be stripped directly from the receipts themselves, allowing for an unprecedented view into the baskets and spending of shoppers.ons
- Value Proposition And Rewards
- This is a core part of any loyalty program and probably the most difficult factors to figure out. Many brands are confused to as to what kind of rewards or incentives should be integrated into programs. Traditional formats such as points accumulation and cash discounts are getting stale fast, and consumers are losing inspiration.
The whole topic of rewards and incentives is far too complex to completely cover in this blog. What is important to keep in mind is three broad questions that will help you select the right reward mix to maximize engagement:
- Does the reward fit the demographic?
- Does the reward fit with your brand/image/program themes?
- What do the rewards cost your brand?
- Customer Engagement
- The main objective of any loyalty program in CPG is to keep engaging the customers again and again. Or put another way; customer engagement is the thing which keeps any CPG loyalty program running. Transforming existing customers into brand advocates is very important.
Here, reviews and feedbacks through several digital channels can save you from failing. How about setting up a portal or a hub for the customers to discuss the ongoing programs, its benefits, issues (if any)? They must be integrated with the social media platforms. And above all that, make sure that you are rewarding the customers with some few points for this engagement too. You can always consider throwing some extra points to customers for creating an account, signing up for a product subscription, writing reviews and references. Ultimately, you should want to steer customers into the direction of engaging organically; not just to earn points, but because they are having a genuine good time.