eMail Loyalty Programs....

Every retailer claims they are engaged in data-based marketing and CRM programs, and indeed, the oft-repeated mantra of retailers is "focus on keeping existing customers over acquiring new customers."

According to David Frankland, principal analyst at Forrester, 33% of marketers cite relevance as a primary factor in the method of communication used to reach existing customers; some 47% say it's often a factor. Yet, he said, "I'd call bullshit on that," pointing out that almost one-third of marketers who capture at least one type of preference data on existing customers take no action based on it.

Indeed, the disconnect is in using data. Retailers have access to or could develop data that is transactional, behavioral, demographic and attitudinal to customize communications, said consultants in the space. But most don't, for many reasons, among them disparate databases running on varying technology platforms, a murky understanding of who owns the data and should be using it and, in some cases, an unwillingness to tackle what can be an expensive and time-consuming project.

Studies have found only 4% of retailers are using purchase histories and transaction data to personalize the content of their customer communications.

"Very few retailers are actually doing a good job of retention and loyalty marketing. Everything else is fundamentally acquisition driven or promotion driven, which is just spam against loyal customers," he said. "That's why you get three to four e-mails per week from every retailer you shop with. Very few retailers understand your behavior and are rewarding you for it."
For many retailers embracing an opt-in loyalty program and then mining that data is the first step toward a more functional data-based marketing program. Best Buy, Neiman Marcus and Sephora,for example, have developed extensive loyalty programs that allow members to earn points and receive targeted communications and special offers. Others, like Amazon, iTunes and eBay, have succeeded at sending specialized offers based on previous selections without the benefit of loyalty programs.