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Data is the backbone of modern marketing. See how loyalty program can help you enrich customer data and simultaneously enhance customer loyalty.
In marketing, data is everything. The more data businesses have on their customers, the better they can design marketing programs and loyalty programs that appeal to them. According to Mckinsey, organizations leveraging customer behavioral insights outperform peers by 85% in sales growth and more than 25% in gross margin. However, you also have to recognize that data is not easy to come by. To get more data from their customers, businesses must get creative while still remembering the human behind the data and their right to privacy.
Businesses have used customer loyalty cards for years as a way to track customer behavior and preferences. With the advent of digital loyalty programs, businesses now have even more data at their disposal. Loyalty programs allow businesses to not only track what customers are buying but also how often they are shopping, what time of day they are shopping, and even what location they are shopping at.
Nevertheless, collecting data is only half the battle. The other half is knowing how to use that data to improve your loyalty program.
This blog post will discuss how loyalty programs can help you collect more data and how data can make loyalty programs more effective in terms of improving customer acquisition and retention.
Loyalty programs, also known as rewards programs, are a fantastic source of customer data. By offering incentives for customers to sign up for your loyalty program, you can collect valuable information such as gender, age, details of transactions, purchase frequency, and more.
These are trusted relationships that customers have with businesses, and as such, they are more likely to share their personal information in exchange for a more personalized experience. As a matter of fact, 87% of consumers are open to brands collecting data of their purchase history if it leads to more personalized rewards according to Bond. The win-win of this type of customer relationship is that businesses can use the data they collect to understand their customers better and create more targeted marketing campaigns, while customers benefit from personalized service and exclusive deals.
Trusted relationships like these are essential in today’s competitive marketplace, and receipt scanning can help businesses to build them. Incorporating receipt scanning, or Receipt OCR, into the loyalty program has brought real benefits to both businesses and customers.
With the help of Optical Character Recognition (OCR) and other AI technologies, Receipt OCR can easily convert images of receipts into structured data that is ready to be used by other software. Consumers can easily gain and validate their loyalty points by uploading photos of their receipts. Businesses can also reduce costs of labor and decrease human errors since Receipt OCR processes images faster and is more accurate than manual data entry.
Retail is a competitive market, with more and more businesses offering loyalty programs. To stand out, you need to stand out from the competition through high-level personalization. Data can help you segment your customers and offer them tailored rewards or recommendations.
However, data isn’t just about understanding your customers. It’s also about understanding your business. With data, you can track your progress and see what’s working and what’s not. You can also use data to test different loyalty program strategies.
Data can help you segment your customers into different groups. This is important because not all customers are the same. Implementing a presumably one-size-fits-all strategy will only lead you to failure. By segmenting your customers, you can tailor loyalty programs to different segments and improve customer satisfaction.
There are a few different ways to segment your customers. The more generic and direct form of segmentation is demographic. Customers are divided into different segments based on factors like age, gender, location, and income.
Behavioral segmentation, on the other hand, works on customers’ behaviors like how often they purchase, what they purchase, and how much they spend.
You can also segment your customers by their lifetime value, which cannot be calculated without collecting enough data. For examples, customers can be divided into segments like VIP customers, who trust your brand the most and frequently purchase from you, and at-risk customers who have not bought anything from your for a certainly period of time. Each segment has its own opportunities and risks and therefore required its own loyalty program strategies.
Data allows you to personalize the offers and product recommendations you give to your customers. This is important because it helps you give your customers what they want. And when you give your customers what they want, they are more likely to be loyal to your business.
To personalize your offers and product recommendations, you will need to collect data like customers’ purchase history, browsing history, and demographic information. Once you have this data, you can use it to create personalized loyalty programs for your customers.
With more data, you can also create more targeted marketing campaigns. This means you can reach your customers with the right message at the right time. When you do this, you are more likely to convert them into loyal customers.
It’s easier to keep a customer than to get a new one. So, it’s important to focus on customer retention. One way to do is identifying inactive customers based on customer data and re-engage them. These are customers who haven’t purchased from you in a while.
Data can help you identify these customers for you to reach out with targeted marketing campaigns. For example, you could offer them a discount on their next purchase. Or, you could offer them a loyalty program that’s more tailored to their needs.
Retaining just a few of these customers can have a big impact on your business since they’re less expensive to keep than to acquire. Moreover, they’re more likely to make future purchases. When they do, they’ll be more loyal to your brand, as they'll have a positive association with it.
Data can also help you improve your customer loyalty programs through testing and experimentation. You can translate customer data into actionable insights and test different loyalty program ideas to see which ones work best for your customers.
This is important because it allows you to improve your loyalty programs continually. As you learn what works and what doesn’t, you can make changes to your programs to make them more effective. When done correctly, this can lead to a continuous cycle of improvement that will help you keep your customers happy and loyal.
Tests lead to analytics that show what’s working and what isn’t. A/B testing is a great way to start. With A/B testing, you test two different versions of a loyalty program to see which one performs better. This could be something as simple as testing two different rewards or two different discount levels.
Then, you can use the data from your tests to improve your programs. For example, if you find that a certain reward is more popular than another, you can make that reward more available. Or, if you find that a certain discount level is more effective, you can make that discount level more available.
Say goodbye to hours spent manually processing receipts. FormX’s receipt OCR model can quickly and accurately extract data from receipts so that you can focus on more important tasks. Our Receipt OCR API is a scalable, intuitive, simple API integration that offers real-time data extraction for any business size.
Major department stores have already incorporated FormX into their loyalty program workflow to not only significantly reduce manual work but also provide better customer experience and drastically improve operational efficiency.