How FedEx Is Using Data to Go the Extra Mile on Loyalty

It’s a newly competitive landscape for brands, with customer loyalty now hinging on so much more than just reward transactions. To meet this challenge, brands like FedEx are exploring ways to optimize their loyalty programs, both for participating members, as well as the business itself.

In an Epsilon Personalive 2021 discussion, we heard from FedEx managing director Michelle Proctor (a FedEx team member for an impressive 27 years), who shared how the delivery services company is enhancing its b-to-b loyalty program for brand marketing. As Proctor says, “For loyalty, most people lean on acquisition and retention, but optimization is a huge key for success.”

Let’s explore how FedEx is optimizing its loyalty program.

Offering varied rewards

Customers are used to having options these days, and that goes for loyalty program rewards as much as product offerings. Proctor shared that personalization within redemption was something FedEx discovered to be a key to loyalty success.

“One of the things we learned during the pandemic was really paying attention to your redemption strategy,” Proctor said. “We grew our offerings and tried to focus on personalization within redemptions specifically. We added elements to our offerings that allowed our members to redeem based on their needs, interests or what they needed at a time.”

Proctor says FedEx saw four behaviors come through once data-driven personalization came into their redemption strategy:

  1. Redeeming for oneself: Members redeemed for themselves individually, as has been the most common action within loyalty programs.
  2. Redeeming for team members: Some small businesses owners who were members in FedEx’s loyalty program redeemed to invest in their team members. During the pandemic, this was a great way to show team members some extra appreciation.
  3. Redeeming for reinvestment: Some small business leaders were looking for equipment and special offers or discounts to help their business grow (certainly a help during the pandemic in particular).
  4. Redeeming for charity: FedEx gave loyalty members the opportunity to redeem their rewards on causes that matter to them, like sustainability and carbon neutrality. Other loyalty programs adopted this approach in 2020 as well, such as Sephora.

“It was important that we give those options to our members, so that they could redeem (for) what was important to them at that point in time,” Proctor said. “It was interesting to see what was relevant to them in that moment and how we were able to help them meet those needs.”

Publicis’ EVP of commerce Amy Lanzi shared in the discussion that it’s imperative to use a data-driven identity solution for loyalty personalization—otherwise it’s not a scalable initiative.

“The only real way to be able to deliver personalization at scale across the consumer journey is if you have a strong identity solution,” Lanzi said. “If you have a great handle on a specific consumer and how they specifically behave, you can look for signals to determine what is the right personalized content for them.”

Applying stretch goals to demonstrate value

Proctor says what many marketers know all too well: “It’s often hard to quantify the value that a loyalty program can bring in hard numbers.”

For loyalty, most people lean on acquisition and retention, but optimization is a huge key for success.

Michelle Proctor, FedEx

In this time of increased scrutiny, showing measurable results for all marketing efforts is crucial. Something FedEx has implemented in the company’s loyalty strategy is stretch goals for members—a way to drive mutually beneficial behaviors for loyalty members and the business simultaneously.

“Through data, we can create different offers for our members that we know definitely are a stretch goal for them,” Proctor said. “When our members attain that goal and redeem, that helps us to show the demonstrable value of our loyalty program.”

And it’s a strategy that feeds itself. The more customers engage with brand loyalty programs like FedEx’s, the more they can understand each person’s unique needs and preferences through first-party data, allowing them to better personalize every customer experience.

Using data to go further with your loyalty program

Brands like FedEx who evolve their loyalty strategy to create more personalized, engaging experiences for their consumers are the ones who will thrive in the new more fragmented marketing landscape.

Data-driven loyalty strategies allow marketers to drive impact at scale and meet the ever-shifting needs of their consumers as well as those of the business. This is a time to innovate and develop mutually beneficial brand-consumer connections that will stand the test of time.