7 Success Factors for Implementing a Loyalty Program

Posted by Maria Pallante

May 26, 2014 3:02:00 PM

You’ve designed a brand-aligned and customer relevant loyalty program. You’re excited about how the program will help you acquire, retain and engage customers in a long-term relationship. Now what? It’s time to turn your strategy into reality. How do you ensure that you’re successful? What important goals do you need to set? Who needs to be involved? After 15 years of successfully implementing and operating loyalty programs, I continue to rely on these 7 success factors.

1. Executive Sponsor & Senior Leadership Commitment

Implementing a loyalty program is a far-reaching organizational initiative and one that touches upon all parts of the business. If you’re a retailer with brick and mortar as well as online presence, your program will interact with all parts of the business from: merchandising, store operations, technology, marketing to finance and the contact center. Having an Executive Sponsor, that will act as a champion of the initiative along with a Senior Leadership team that is aligned with this initiative is crucial. When Leadership is in sync and committed to the loyalty program, that commitment is echoed by the respective teams and the appropriate resources are allocated to your loyalty program. Establishing a Steering Committee with these stakeholders is often a good means of continuing dialogue throughout the implementation. Key decisions or questions can also be brought forward to this group as necessary.

2. Implementation Planning

Once you have Senior Leadership commitment, implementation planning is next. If you haven’t implemented an initiative like this before, bring someone onto your team who has or work with an agency that specializes in implementing and operating loyalty programs. Regardless of the path you choose, you will need to define an internal Loyalty Project Lead or the go-to person within the organization, a core working committee and extended sub-committees with their own respective responsibilities. The following also need to be prepared as part of planning:

  • Program scope/business requirements
  • Communication protocol
  • Approval requirements
  • Project timeline sequence and dependency of activities
  • Program success measures

3. Member Experience - Brand-Aligned & Easy

One of the top drivers of satisfaction in a loyalty program is that the program experience is consistent with the company’s brand experience (2014 Bond Loyalty Report). Brand consistency is key when designing enrollment, identification and engagement experiences for a loyalty program. For instance, if you are niche brand, you’re likely in a position to provide a fully digital enrollment and identification experience using a mobile app. In contrast, if you’re a mass retailer, you’ll need to consider a physical token option in addition to a mobile-enabled one. Account management will likely be different based on the screen someone is using as well. As a member, I’ll expect to see and do more on my computer screen in comparison to my smartphone app. And keep in mind ease of use when defining the experience – whether it’s enrollment or redemption. Ease with which rewards can be redeemed is another important driver of program satisfaction.

4. Scalable Technology Solution Design

The key benefit of a loyalty program is the ability to tie a customer’s identity to their activities and habits. How this gets done varies by program, but arriving at a single-view of the customer is the goal.

A number of systems will need to be integrated in order to support a seamless experience for the customer. The technology solution needs to support the customer experience across all channels (POS, online, mobile app) and identification across all channels. Whether the activity is a purchase transaction (retail, ecommerce, etc.) or a non-purchase transaction, the technology supporting your program needs to be able to consume and score this information overtly like you would see in a points construct or covertly for later use. Often, a loyalty platform solution can act as an integrator of these systems providing the rules engine for scoring and the single customer view to support relevant customer communication. 

It’s important to consider long-term system requirements as well – so ensure the technology is scalable to handle greater complexity as the program evolves. The technology should support setting up promotions/campaigns/multi-channel communications, modifying programs rules, managing content, reporting and program innovation. 

5. Employee Tools & Training

Employees are an extension of your brand and they can further your program’s success or let it fall flat. Employees, especially front line staff in-store or within the contact centre, require appropriate training with regards to the program, processes and tools. Walgreens Balance Rewards is a good example, where they ran a multi-week rollout to employees first to ensure they were trained and familiar with the program before launching it to the public. Technology tools and processes can and should empower employees to support resolving issues quickly. Technology tools can actually take a member’s experience one step further and provide employees with the information necessary to personalize a customer’s experience. For instance, an employee or store manager can be alerted when a high-valued member checks in on their mobile app while in-store. Additional benefits or services can then be provided to that member.

6.  Market Launch

Prior to rolling out your program, consider a soft launch or pilot. These scenarios provide a great means to work through operational issues and course correct prior to launching on a larger scale. An employee rollout prior to a market launch is often a good means of getting your employee base familiar with the program in a way that training alone won’t be able to. However you pilot, allocate time to build interest prior to going live; consider in-store promotion, online promotion, receipt messaging, e-mail, text and social media.

7. Optimize, Optimize, Optimize

Once your program launches, you have an opportunity to evolve the program – use the data you are capturing to target marketing campaigns to drive desired behavior. Focus on continuing to provide relevant communication to your members and engage them in new ways to give them a reason to continue their relationship with you. 70%of customers leave loyalty programs because they become impatient waiting for points to accumulate. Close to 70% of Canadian loyalty program members have lost interest in participating in at least one of the loyalty programs they belong to (2014 Bond Loyalty Report). And HBC Rewards (Hudson’s Bay) provides us with a great example of what not to do. At its peak it had 9 million members, and when they announced an overhaul to the program, membership had decreased to 4.6 million.

Do not become complacent because you’ve achieved one or more goals. Remember to monitor, measure and continue to innovate!

 

Maria Pallante
VP, Operations

Topics: Brand Loyalty, Loyalty Program

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