The importance of personalization

Let's be honest. When it comes to customer retention, most brands don't dedicate the necessary resources to personalization. They believe that out-of-the-box loyalty programs alone can do the heavy lifting, but if that's the focal point of your retention strategy, you're putting yourself at a major disadvantage. If you want to see real improvements in your retention, it's all about reaching your customers on a hyper-personal level.

And customers are expecting that personalized experience at every step of the process—they want to feel like their favorite brands really know them. According to data from McKinsey, over 76% of consumers said that receiving personalized communications was a key factor in prompting their consideration of a brand, and 78% said such content made them more likely to repurchase. This belief in personalization is why we recently merged with Repeat. It takes the complication out of building hyper-personalized messaging, making the process simple, automated, and even more effective than before.

Let's take a look at the critical areas in your loyalty program where personalization can be the difference between one-time buyers and unwavering brand loyalists.

1. Treat loyalty like a merchandising lever

Let's be honest. When it comes to customer retention, most brands don't dedicate the necessary resources to personalization. They believe that out-of-the-box loyalty programs alone can do the heavy lifting, but if that's the focal point of your retention strategy, you're putting yourself at a major disadvantage. If you want to see real improvements in your retention, it's all about reaching your customers on a hyper-personal level.

And customers are expecting that personalized experience at every step of the process—they want to feel like their favorite brands really know them. According to data from McKinsey, over 76% of consumers said that receiving personalized communications was a key factor in prompting their consideration of a brand, and 78% said such content made them more likely to repurchase. This belief in personalization is why we recently merged with Repeat. It takes the complication out of building hyper-personalized messaging, making the process simple, automated, and even more effective than before.

Let's take a look at the critical areas in your loyalty program where personalization can be the difference between one-time buyers and unwavering brand loyalists.

2. Look beyond breakage to measure your program

Points breakage is one of the main results indicators that customers new to Stamped care about, but it's actually only one part of the puzzle.

Every loyalty program has members who don't redeem their points, leading to eventual expiration—this is known as breakage. Breakage can occur for several reasons, such as difficulties in redeeming points, members forgetting about their enrollment, rewards that are unappealing or less relevant, or redemption thresholds that feel too high or costly. Regardless of the reason, breakage signals missed business opportunities, with inactive customers often at the core of the issue.

With that in mind, it's only natural that most brands look at breakage to measure the success of their loyalty program. The issue, though, is that this measurement creates tension between finance and marketing. Finance wants higher breakage because less redemptions means lower costs to fund the program; marketing wants lower breakage because that means the loyalty program is actually working.

But what if there's a better way to measure impact? A way that reveals more about how your loyalty program is affecting customer retention?

Instead, you can look at the percentage of loyalty program purchases that included a points redemption versus the percentage that didn't. This view eliminates the finance-marketing tension and puts more of an emphasis on participation at the purchase event level, as opposed to the points level.