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Link to Part 2: https://loyalty360.org/Content-Gallery/Daily-News/Best-Practices-for-Revamping-a-Loyalty-Program-(1)
It would be easy for brands that have a successful loyalty program in place to simply leave it be and let it do the work for them. However, in today’s climate, it takes more to retain customers who could easily become bored with a program and lose interest in a rewards program that remains stagnant. But how can a brand determine if its loyalty program has become stagnant and needs a refresh?
Loyalty360 spoke with supplier members for their insights and perspectives on ways brands should best incorporate updates to their loyalty programs, including how often to make updates and ways brands can best update on a budget.
“Modern loyalty is heavily dependent on a consumer’s emotional connection to your brand and the overall lifestyle your brand represents,” explains Sue Frech, Founder & CEO of Vesta. “Any traditional loyalty program that relies largely on transaction-based rewards should consider it time for a refresh. While this system can work in the short term, it rarely delivers the long-term relationship-building brands need to do to stay competitive. Today’s loyalty programs need to infuse emotionally driven and personalized rewards from zero-party data. They must also make a consumer feel a part of a bigger community of consumers who share similar values.”
Nancy Gordon, Chief Product Officer, Loyalty & Rewards at Bakkt says, “Brands become aware of a need for loyalty program evolution either actively or passively. An active and agile approach is best to ensure program health. The optimal active approach brings together market intelligence and insights, consumer primary research and alignment with the brand’s strategy, customer engagement and financial targets.”
Deloitte suggests brands explore how their programs are aligning to prevailing trends and competitive dynamics in the market before they become stagnant because at that point, it’s often too late.
Says Brendan Boerbaitz, Deloitte Senior Manager, “We’re seeing a similar set of macro forces driving boardroom discussions impacting the world of loyalty, be it supply chain disruptions driven by geopolitical conflicts to rising demands for corporate action on the topic of climate change. This makes sense when you view loyalty programs from members’ perspectives: it’s often their closest connection to a brand and many prove to be quite sensitive to how messaging, experiences, and offers align with their attitudes, needs, and values. These shifts have resulted in what we now characterize as a global battlefield for loyalty, where program leaders must now break through a new range of barriers to differentiate, be it attention-starved members with higher expectations than ever to new investments in the space from traditional and untraditional players.”
Steve Palladino, Chief Growth Officer at Group FiO says that brands can tell their program is in need of a refresh when customers are no longer joining, when new members who were active at the start begin to taper off, and customers are no longer redeeming rewards. He also notes that long-term customers may become upset that brand-new customers enjoy the same perks.
Ravi Srinivasan, President and CEO of Group FiO, agrees, adding, “The program is stagnant when the rate of engagement from members is reduced which is measured by point accumulation or redemption. Another factor is the members are not offering up or reducing Zero Party Data collection efforts which helps build personalized engagement.”
Bakkt suggests that if a competitive program increases value, then a new bar is likely set that requires evaluation. Says Gordon, “One of today’s leading programs, Amazon Prime, has set the bar very high in terms of both “free shipping” and “expedited shipping,” to the extent that many retail loyalty programs cannot avoid providing these costly benefits to their members.”
Jillian Dimoff, Strategic Account Executive at Cheetah Digital, lists these indicators to test if a loyalty program has become stagnant:
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