Unlock Your Business: How Clutch Evolves Personalization into Individualization with AI and Machine Learning

Clutch is a retention marketing platform that provides flexibility and customization to brands across a range of industries. The Clutch platform is broken into five distinct modules including:

• Customer Data Platform (CDP)
• Loyalty Management
• Marketing Orchestration
• Gift Card and Stored Value
• Offer Management

Over the past ten years, Clutch has partnered with its clients to innovate their customer loyalty programs and strategies , continuing to leverage emerging technologies to drive more effective personalization.

Clutch has grown out of retail to deliver this innovation into grocery, fuel/convenience, consumer packaged goods, hospitality, healthcare, and finance industries. The Clutch platform is built with flexibility and manages all these verticals, simplifying the work of marketers.

Mark Johnson, CEO of Loyalty360, spoke with Andy O’Dell, Co-Founder and Chief Strategy Officer of Clutch, about new trends in customer loyalty, how to drive engagement with the brand through adding product value, and how brands should move from personalization to individualization.

Building Experience-Driven Programs Over Spend-Driven Programs

Coming out of COVID and managing current economic uncertainty, price sensitivity is top of mind, with some consumers looking for brands who will give them the best offer. As companies compete for this limited amount of spend, they need to look for ways to increase the value of their offerings, without necessarily providing financial discounts.

Studying the changes in customer behavior following the pandemic, Clutch found that consumers are more willing to engage with brands who deliver experiences. Brands that deliver better, differentiated experiences for the individual in the current economic climate will find consumers are more willing to engage.

“We’ve emerged into an experience-driven economy. Having the best price, the best product, and the best location are no longer the leading indicators of success that they once were,” says O’Dell. “Consumers will travel farther and pay a premium for something that feels different. Feel can take on a lot of different definitions in this construct, but I think experiences are where the battleground is starting to shape up.”

Part of delivering on this experience is by extending the value of products and services. Considering today’s economic uncertainty, consumers are spending less across all industries. With this diminished frequency, brands need to consider ways they can increase the value of their offerings without diminishing the value of the products.

“When you look at these changes referenced across different industries, how can customer loyalty programs and strategies impact customer behavior?” asks O’Dell. “If I have $100 to spend, am I going to spend it somewhere I will only get $100 worth of product, or will I spend it somewhere I’m getting $100 worth of product and something else? Maybe a better experience, a discount, or rewards points I can redeploy later to stretch my dollars on the next purchase.”

Brands create customer loyalty through this extended value. Consumers continue to return to those brands because they know their money will go farther. Clutch has seen many high-ticket item brands lean into this concept to both improve the customer experience and build loyalty in low-frequency purchase industries.

“With cars, it’s additional service value that consumers can add on to the purchase price. So, your first X number of oil changes or services are now included in the purchase price,” says O’Dell. “They’re finding ways to extend the value that consumers are paying for without diminishing the value of the product.”

Individualization: A Step Beyond Personalization

When it comes to building an engaging customer experience through the loyalty program, there is not a one-size-fits-all solution. Customer experience must be tailored to each brand’s unique audience. The first step is understanding those customers’ behaviors, interests, and needs.

For O’Dell, this involves leaning into emerging technologies like artificial intelligence (AI) and machine learning (ML). These technologies allow brands to gather data on loyalty program members and act on it to provide each member with a unique experience.

“I think we’ve moved into Individualization, which is a step beyond Personalization,” says O’Dell.

Individualization — sometimes referred to as one-to-one personalization — is about customizing the brand experience for each user based on their unique data. Personalization relies on segmenting the customer base into categories. Each of these is based on a group of users with similar demographics. While this may deliver promotions and experiences that hit close to what the individual wants, it does not deliver the same level of customization.

Before AI and ML, personalization was the closest brands could get to a unique experience at scale because of the amount of data that needs to be handled. However, O’Dell recommends marketers start leaning into these new technologies because of their ability to collect and act on customer data at the individual level.

“Brands need a platform that can truly execute one-to-one — not just from a marketing standpoint — but where I am in my own loyalty program. So, if a brand has 10 million consumers in their program, they really have 10 million loyalty programs. They don’t have one program that has 10 million people in it,” says O’Dell. “That’s the big trend I think is starting to take form right now, and why there’s so much investment in the ML and the AI side of things. Marketers would never be able to scale that level of individualization without automation and artificial intelligence doing the work for them.”

Changing the Landscape of Loyalty Marketing

These new technologies also help marketers stretch their own resources through economic uncertainty. Facing challenges with staffing, consultation, and strategy, brands seem to place more emphasis on execution and optimization. Many loyalty programs are re-platforming, switching to options that can do more with less outside support.

The integration of AI and ML into customer loyalty allows marketers to hand over some of their responsibilities and work to the systems. O’Dell gives the example of a Tesla driver allowing the car to drive itself.

“I think marketers are looking for solutions that will do some of the driving for them,” says O’Dell. “This will save them time, money, lost margin, churn, and a lot of other KPIs that they’re measured by as well.”

In light of the impact these new technologies can have on marketing, loyalty strategy needs to start with data. Brands must have a CDP to have a space to consolidate their customer data. Then they must act on it.

For this, brands need to incorporate AI and ML into their loyalty strategies to drive individualization and improve the customer experience on their platform. While there is an initial cost to integrating the new technology, the ROI is worth the investment.

“You’re going to have to make this investment in core infrastructure to execute an effective long-term ML or AI-driven strategy,” says O’Dell. “You calculate the ROI based on the ability to affect individualized loyalty strategies driven by machines to propel your business forward. In a way, that feels completely authentic to me as the consumer. That feels valuable to me and enhances my willingness to provide you with my loyalty, whether there’s a program that I’m opted into or not. It’s a better experience, less friction, and more timely.”

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