Applying technology to boost customer loyalty

Guesswork no longer cuts it. Smart companies are using business analytics software to improve customer loyalty.

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Analytics also enables SuperValu to engage with customers through the most effective medium, be it email, text messaging, mobile apps or social media, Story says. The old-school approach was to ask customers which channel they prefer; however, it's far more accurate to watch their behavior, he says. So, for a highly digital customer, you increase activity where they respond the most -- maybe text and social media -- and drop it in the media where they're less active, like email and snail mail.

Predictive analytics is the next step, Story explains. The grocer is experimenting with segmenting customers and predicting their behavior by overlaying loyalty-card data with demographic, psychographic, behavioral and economic information from external providers. By seeing, for instance, the effects of the recession on shopping patterns, SuperValu can better predict which customers will switch to lower-priced items during a downturn and proactively market store brands to them. The company is also reaching out to digitally savvy consumers via mobile apps and social media.

"That's the secret sauce," Story says. "Bringing it all together to understand what the redemptions are, how we offered them, through which vehicle, where they [were] redeemed, which [channels] customers are most active in -- and their social media influence if they are a highly connected consumer."

Copyright © 2012 IDG Communications, Inc.

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