5 assumptions that will doom your loyalty program

Loyalty programs are the cherry on a sundae; consumers come to expect them when making everyday purchases.  While companies commit financial and employee resources to build loyalty programs, they must remember those programs are the cherry; not the ice cream, the bowl or even the hot fudge.  A company’s success depends on the quality of its products, the competency of its people, and their ability to meet the market need they look to fill.  Without those things, a loyalty program is as attractive as a cherry in an empty sundae dish.

As companies look to deliver innovative and effective loyalty programs, they must be aware of the danger that comes when quality is compromised.  Below are 5 statements that signal a concession is being made that will impact your chance of success with a loyalty program:

1) “My customers will just have to…”

The beauty of being a customer is the ability to choose where to spend money.  Expecting a customer to spend a disproportionate amount of time to learn about a loyalty program or to earn and redeem rewards is unrealistic.  They will quickly move on from a poorly designed app or a program that limits when rewards can be redeemed.  Make the customer experience one they seek out, want to share with friends, and integrate into their everyday shopping.

 2) “My site staff needs to…”

The ability to influence front-line personnel in promoting a loyalty program is the driving force in determining its success.  What is going to make promoting a loyalty program feel like more than “just another thing I have to do?”  You can try the line, “Our store’s success is what keeps the cash flowing and you getting your paycheck.”  If your staff truly buys into that, congratulations; you should feel fortunate to have a loyal staff!  But I’m guessing that’s not the case for most businesses.  A loyalty program must be easy for site staff to understand, communicate, and use themselves.  A staff member who can’t talk about how the program works is telling the consumer it’s not worth it to enroll.

3) “My distributor needs to have skin in the game.”

For the multitude of brands who go-to-market through franchisees, dealers, and other distributed models, creating a consistently executed loyalty program requires working through an additional layer of people and priorities before reaching the end consumer.  Thinking that a loyalty program is going to be the same priority for the distributor as it is for folks in the home office is unrealistic, but you can still gain buy-in with the right tactics.  Come up with measurable incentives that tie performance on your loyalty program back to the distributor’s bottom line.  You already share in the risk/reward of executing programs with these business partners, and loyalty programs should be no exception.

4) “This should be a focus of the Sales team.”

Ahead of what?  Adding new locations?  Keeping a competitor from poaching customers?  A loyalty program should make Sales team jobs easier, not add a burden.  Give your Sales team the basic knowledge they need to be an ambassador for your program, but don’t expect them to be the ones who know the ins and outs.  Make your loyalty program an asset among many for them to draw from to close a deal, and then have a person or team that can carry out on the promise they made for the loyalty program to add value.  Forming a partnership and gaining buy-in from Sales leadership early on will pay huge dividends when it is time for a program to go live, and more importantly, when it hits the inevitable speed bump after launch.

5) “We need to beat our competition to market.”

Many components of a loyalty program can be new and challenging to a business.  Few companies staff a team of app developers and card imprinters unless that is their core business.  Racing to be first with a loyalty offer can be expensive, and if not done right, can do more harm than good if you let down your best customers.  Consider being a fast-follower who learns from the successes and failures of industry peers.  Take the time to understand what will make your customer base more loyal in a sustainable way, and don’t just bring them the next shiny thing if it doesn’t influence their long-term purchase behavior.

There is no silver bullet for landing a successful loyalty strategy.  However, if you avoid these five assumptions as you plan your strategy, you will increase your chance of success.

This is part 1 of a 2 part series on loyalty. Part 1 was written by Zach, who can be contacted at zpastko@wcapra.com. Part 2, “Loyalty and the Consumer Experience,” can be found here.


Spotlight on Loyalty: Part I of II
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