Marketers have so many decisions to make during the planning, testing, launching, and executional stages of a loyalty program. Getting it right from the start is massively important.
Loyalty360 hosted a webinar on Thursday titled, “Measure Twice, Cut Once – Get It Right From The Start,” which was presented by Bond Brand Loyalty.
Richard Schenker, Senior Loyalty Consulting Director, Bond Brand Loyalty; and Maria Pallante, Vice President, Operations, Bond Brand Loyalty were the featured webinar speakers.
The webinar highlighted some key failure points and offered great advice toward successful implementation strategies that will help any marketer realize loyalty program success through an optimal member experience and exceptional company-wide execution.
“Everything we do builds brand loyalty,” Pallante told attendees. “There are simply no shortcuts to loyalty program success.”
There has been a massive proliferation of loyalty programs in recent years. In 2014, loyalty program memberships averaged 10.9. That figure is now at 13.3
“Brands are using loyalty programs to foster transactional and emotional connections between brands and consumers,” Pallante said.
Although loyalty program memberships are on the rise, program activity is not keeping pace with enrollment. Last year, the average number of loyalty programs used was 7.8, which fell to 6.7 this year.
Pallante outlined some causes of disengagement: Lack of brand alignment; customer relevancy, executional excellence, and long-term financial viability.
Brand alignment is a critical ingredient for loyalty program success, Pallante said, offering that 57% of loyalty program members say the experience with the program is consistent with the experience with the brand.
“One size fits all is no longer relevant,” she added.
Brand-aligned loyalty programs result in 3X higher satisfaction among customers; 6x increased likelihood to recommend; and 8x likelihood to continue doing business. What’s more, customer relevancy and executional excellence are critical ingredients to loyalty program success.
But, Pallante noted the following common pitfalls.
Lack of consideration for executional realities in the design stage
Frontline staff are not evangelical brand ambassadors
Lack of clarity and continuity of expectations (especially with new employees)
Unchecked accountability and measurement (from management to frontline staff)
Poor promotional execution of campaigns (in-store, online, social)
Competing business priorities (e.g. program becomes a sideshow over time)
These result in poor execution, sub-optimal customer experience, and program apathy.
Pallante and Schenker provided 10 ingredients for executional excellence based on a retailer case study:
1: Secured senior approval and support to form a dedicated cross-functional project team.
2.Integrated Head Office operations & Store Operators
3. Created a safe collaborative environment where all stakeholders were accepted and heard.
4. Secured alignment before receiving approval from executive team
5. Field training was led by operations and supported by marketing.
6. Identified a “loyalty captain” in every store.
7. Program opened up to staff prior to launch (“This is absolutely crucial,” Schenker said. “It allows staff to foster incredible relationships with customers.”
8. Defined and measurable goals were established from the CEO to the cashier.
9. Leveraged learnings from pilot to “right size” any operational challenges.
10. Ensured it had an ongoing training regimen for new employees.
11. Created a genuine store operations feedback mechanism. (Important to have communications between field and head office). Best practice shared across organization.)
Another key component of a successful loyalty program is member experience (enrollment, identification, rewards & benefits, customer engagement).
Enrollment is the first step in the value exchange, Pallante said.
“You want to get it right,” Pallante said. “Loyalty is about being able to engage with your customers. It’s important to convey why you’re collecting certain information.”
Regarding rewards and benefits, Pallante believes marketers should “keep it simple for members and employees, simple and easy to understand. Focus on up to three key benefits.”
She added that other benefits can be added later or leveraged for surprise and delight.
Schenker concurred.
“Sometimes, less is more,” Schenker said. “The reality is the consumer is bombarded by so many different loyalty offerings. You want your loyalty offerings to resonate with them. It’s important to keep those fresh and make sure they resonate with the consumer.”
Planning for data a marketer needs now and in the future is critical to delivering relevant personal communications. As far as loyalty technology solutions go, a marketer needs to determine what is right for that particular company, something that is scalable and flexible for the future.
Measuring the success of a loyalty program can sometimes be difficult, but Pallante said a marketer wants to see at least 50% of transactions tied to its loyalty program. What’s more, a marketer wants to see a metric of 75% when it comes to enrolled members being marketable.
Pallante and Schenker listed five key takeaways for attendees:
1. Include stakeholders early on in the design phase and throughout the process.
2. Ensure design is pragmatic and simple for customers and staff to execute.
3. When selecting a technology solution, consider scalability for the future.
4. Formulate highly measurable goals and hold all constituents accountable.
5. Plan for the long-term and commit to continuous evolution and optimization.