Although the idea of 1:1 personalisation is alluring, scalable loyalty plans are created around sizable loyalty segments that have similar demands and have promise for the company. Because there are so many possibilities and no one best solution, loyalty segmentation is a fun but frustrating task. Because most marketers who employ advanced personalisation based on segmentation enhance ROI by 200% when compared to a one-size-fits-all strategy, the challenge is unquestionably worthwhile.

Choosing an Effective Segmentation Framework

Here is a strategic segmentation structure based on the LoyaltyLevers Benefits Framework that is initially constructed around three important loyalty factors:

Engagement: In this situation, factors include programme participation, benefit utilisation, communication participation, and website visits.
Loyalty Attitude: This is the degree of total brand affinity and emotional loyalty as determined by surveys, usually among a sample of members.
Psychological Loyalty: The value for each member as determined by the volume of visits, the amount spent, the margin, and the evolution of expenditure

Segment 1 of Loyalty: Gamers

Some members enjoy the excitement of the hunt, racking up as many points and rewards as they can by taking part in a variety of activities and looking into every reward option. They are consequently very active in all forms of communication. Many people often visit the website or the specific loyalty app to see if any awards are available. Gamification is therefore quite appealing to this demographic. In addition to sharing their accomplishments with others, gamers are always looking for new ways to maximise their revenue. Flyertalk, The Points Guy, and other forums have entire sections dedicated to this.

In fact, it’s possible that this loyalty group is so preoccupied with the hunt that they fail to pay attention to brand messages at all, which prevents them from becoming really loyal to the company. Games players have a reputation for looking for the best bargain and return on investment, which shows that the rewards programme is buying rather than fostering loyalty. Based on their importance to the organisation, as well as their varying levels of participation and loyalty sentiment, you’ll probably find a number of different sub-segments of games players.

The goal is to take advantage of the high levels of engagement among game players by integrating Sentiment Builders that increase switching costs beyond just financial factors. Sentiment builders include things like personalised experiences, VIP treatment, surprise-and-delight elements, and more. Of course, there are a tonne of other loyalty programme advantages to be discovered as well.

Segment 2 of Loyalty: Brand-Driven

The Brand Driven market is completely the opposite of the Games Players market. Their decisions are mostly impacted by brand and customer experience factors, and brand-driven customers may engage with the loyalty programme minimally to not at all. Their schedules appear to be quite full, and loyalty schemes may seem too complicated to be worth the effort. This market segment worries many executives since it can result in high marketing expenses with negligible results.

Simplicity is crucial for success with Brand Driven Loyalty Segments since these customers have little tolerance for convoluted earnings systems, delayed gratification, or redemption red tape. The goal is seamless integration with the customer experience, and as Brand Driven members become aware of how the loyalty programme improves the brand and simplifies their life, they will become active participants. Automatic award generating and individualised earning opportunity recommendations are appealing features. Generic advertising, regular emails, and extensive lists of partner opportunities, on the other hand, are likely to go unnoticed.

Segment 4 of loyalty: Belongers

Belongers, who typically make up the majority of participants in any loyalty programme, may have signed up for it out of habit or possibly as a result of effective marketing. They probably signed up for dozens of loyalty programmes, but given the bustle of activity, they might not recall the majority of them. Depending on the kind of programme, up to 50% of new participants may be “one and done,” never to return. Most programme managers still find it confusing, but it doesn’t mean this audience has no value.

According to one notion, Belongers are still using the company’s products but aren’t using their loyalty cards. There may be opportunities to combine several data sources in order to identify these people’ ongoing activities and entice them to self-identify, depending on the permissions received upon enrolling.

Others can be high-value potential clients who have only ever used your brand once and have remained devoted to your rivals. The holy grail is finding and converting consumers with that much potential! You can find specialised audiences for highly-targeted, valuable offerings that will appeal to this group and provide significant returns by improving data for these consumers and creating predictive models for past converts.

How to Begin Loyalty Segmentation

The analytical foundation that is the cornerstone of each successful company loyalty programme culminates in segmentation. The goal is to embrace segmentation and consistently test and learn to find what works best for your organisation. According to LoyaltyLevers, segmentation is both an art and a science, and while the most effective categories will differ greatly from one brand to another.

Antavo provides a highly advanced, API-based, no-code loyalty platform, which is capable of empowering the incentive programme of your dreams. If you send an RFP, the professionals at Antavo are more than delighted to schedule a demo or offer specific advice.

Here is a thorough essay and helpful worksheet that will walk you through the preliminary stages of creating a compelling loyalty programme concept.