So far, 2020’s been something of an emotional rollercoaster. If you’re feeling a little overwhelmed, you’re not alone...and we’re still only a few months in. But if there’s one upside to all the uncertainty, it’s the way in which it’s encouraged us to connect, empathise and be kind. Learning to be more in touch with our emotions is a good lesson to take into the rest of the year – especially for retailers.

According to Sephora’s VP of Loyalty, 75% of customer engagement is emotional. And she should know: the high street cosmetic brand’s Beauty Insider programme routinely lists among the best loyalty offerings out there. Research shows that there are 3 kinds of loyalty – behavioural, rational, and emotional – and emotional is by far the most valuable. Not only are emotionally engaged customers more likely to keep your brand front of mind, they also spend up to twice as much.

Clearly, creating an emotional connection is critical. But to do it, you need to start with tech.

Understanding what customers want

Good loyalty programmes keep customers front and centre. It sounds obvious, but hasn’t always been the case. Up until pretty recently, a lot of loyalty concentrated on driving behaviour change – getting customers to go out of their way to earn rewards and increase revenue. Now, that tide is turning.

Today, two things are important: a delightful customer experience, and rewards they really want. Capgemini expands on that, suggesting real-time interaction opportunities and differentiated shopping experiences as two ways brands can build emotional loyalty.

But it’s easier said than done. Delivering delightful and differentiated experiences starts several steps back. Knowing what your customers want requires you to know your customers – and that means capturing data. For Sephora, the turning point in their Beauty Insider programme came with the launch of an online community in 2017. It gave the brand a chance to listen to customers and get a better understanding of their wants and needs. In short, it gave them access to data.

And that’s where a lot of retailers struggle.

Why retailers struggle to get a single customer view

The problem isn’t so much to do with quantity as it is quality. Omnichannel is part of the issue. Retailers know that in today’s shopping environment, customers expect a consistent experience across every touchpoint – whether online or off. And while adding new channels is a great way to interact with customers and collect a high volume of data, it can soon become overwhelming. Different payment processors and platforms proliferate across channels. Archaic infrastructure makes it difficult to access data even if you have it. It makes the identification of consumers uniquely a near-impossible task.

Data capture methods vary from channel to channel, too. A lot of digital data capture methods are just that: digital. They don’t have an offline equivalent and can’t give a holistic view of customer behaviour. Methods that are channel-agnostic also have their issues. Loyalty cards rely on customers changing their behaviour to present them at checkout, and that causes friction. So much for a delightful customer experience.

More often than not, what you end up with is an uneven journey and an incomplete picture. It’s not surprising that getting that single customer view has become the Holy Grail for retailers. But how?

Getting the right data, the right way

Unfortunately, quality data capture often comes at the expense of a seamless customer experience. But it doesn’t have to. Cutting out things like loyalty cards, codes and coupons and capturing the payment itself removes the hassle for your customers, and gets you the detailed transaction data you need.

There are a few ways to get hold of that data. You can either source it from the customer’s bank account, from their payment card. APIs now make it easy to get access to both. FinTechs were first to harness the power of the API economy, but the opportunity is huge for retailers looking to create loyalty, too. Using APIs to access payment data cuts the usual cost and complexity of getting it direct from the source (banks or card networks), and lets you scale programmes efficiently and at speed.

Capturing payment data works well for building emotional loyalty. It doesn’t require any behaviour change from your customers, so their experience is smoother and more engaging. And they’re comfortable sharing payment data, too. There’s a perceived notion that customers are cagey about relinquishing their data. That’s partly true  – there’s certainly more scrutiny over it following a spate of big breaches, and the cost of mishandling it can be significant. But APIs for payment data have grown out of Open Banking regulation, which aims to put consumers back in control of what data they share and who with. Research shows that as long as customers feel there’s a clear value exchange for their data, they’re generally pretty happy to share it.

Finding the tech for you

That’s not to say you don’t still need to be meticulous with how you capture data. Different APIs – account-linked or card-linked, for instance – capture data from different sources. They therefore deliver different formats and levels of data granularity. It’s important to choose the right fit for your use case. Linking to payment cards is preferable for loyalty. It means customers don’t have to give away all the information in their bank account. And data is tokenized before it’s sent, so you don’t need to worry about managing compliance requirements.

Card-linking also delivers a better customer experience. Because data is captured from the authentication stream (ie, when the payment is made, rather than when it clears in the account), you get it in real-time. Remember what Capgemini said about  using real-time interactions to build emotional loyalty? Card-linking enables that. Being in dialogue with your customers at the point that they’re spending with you helps embed your brand into their everyday life. And since it works both online and offline, it gets you closer to that single customer view.

It might sound counter-intuitive, but getting emotional with your customers starts with getting technical. The right tech makes it easier to create a seamless experience. The better the experience, the more likely customers are to engage. The more engagement, the more quality transaction data you’ll get. And with that data, you can build the differentiated shopping experiences that connect to emotional drivers and keep customers coming back.

To find out more about how card-linking works and if it’s the right fit for your business, download the cheat sheet.