I’ve been living in the land of loyalty programs for enough years now to have been on the receiving end of the pain of “no thanks” and the pleasure of “yes please”.
Here are six of the most common P’s for “no thanks” with some suggestions on turning the “no thanks” to a “yes please” further down in this article.
1. Purpose: No clear and compelling reasons for program.
There is no leadership buy-in or belief in the purpose of a loyalty program – be it problems to solve for the business and customers or value to add to the business and customers.
2. Priority: Other competing strategic priorities for business growth.
Strategic priorities for business growth are specific to the nuances of a business’s modus operandi and relevant market forces. However, if a loyalty program is not in the top 3 business growth priorities…”no thanks” is often the answer to the question!
3. People: No person to own and manage the loyalty program asset.
This is so fundamental to the long-term success of a loyalty program. As soon as I hear “no thanks, we don’t have anyone to manage the program” … the amber and red lights start to flash! This again feeds into priorities and proof of purpose.
4. Program’s proposition vs brand promise: Unsure of the connection of the loyalty program proposition to the brand’s promise.
A loyalty program is a proof point of the brand’s promise. They co-exist!
5. Platform (Technology): No clarity on how a program can integrate with existing technology infrastructure.
Retrofitting a loyalty program into an existing technology platform is like purchasing an off-road car for city driving…it can work but it’s not fit-for-purpose or fit-for-future.
6. Profit: No financial rigour to prove the performance of a program and its net return on investment over the longer term.
No need to push this too hard except to say “critical to success”.
From “no thanks” to “yes please”.
For each of these obstacles there is a way through. Finding the way through these barriers requires:
- a modified mindset
- rigorous planning, and
- a commitment to find the solutions to each.
I’ll leave the mindset to Ryan Holiday[1] and give you some tips (not exhaustive) on how to turn a “no thanks" into a “yes please”.
1. Purpose: No clear and compelling reasons for program. There is no leadership buy-in or belief in the purpose of a loyalty program.
This is perhaps the most important obstacle to overcome.
- If there is no clear purpose for a program and no loyalty program champion in the leadership team, a program will not see the light of day.
- Opening the leadership teams' perception to the possibility of a program is the goal.
- Even with a hint of scepticism, if the door for a program is slightly ajar, take the spark and ignite the proof of a program’s purpose and performance.
- Find a leader open to the potential of a loyalty program and find out what is needed for the loyalty program to move from possibility to reality.
- There are multiple problems a program can solve for the business and customers AND multiple means to add value to the business and customers.
(Hint: Any or all of the following points 3. – 6. will help)
2. Priority: Other competing priorities for business growth.
- Priorities for business growth are multi-faceted and unique to the dynamics of each business.
- Some of the priorities a loyalty program can deliver to are:
** Income (more incremental revenue from existing customers)
** Insights (data availability for analysis to reveal insights for relevant action for business improvement and enhanced customer engagement)
** Advocacy (customer care leading to recommendations and referrals). - Prioritising a program relies on 6. Profit, which is ultimately a sum of the impact of 3. People + 4. Proposition + 5. Technology.
3. People: No person to own and manage the loyalty program asset.
- Every strategy is just an idea until it is executed.
- A dedicated person (and team) to own the implementation and ongoing management of a program will give it the greatest chance of success.
- Adding a loyalty program to an existing person’s role is often a stepping-stone for their growth and motivation (I have seen this happen time and time again!).
(Hint: If there's a will, there's a way...it's that mindset thing again)
4. Program’s proposition vs brand promise: Unsure of the connection of the loyalty program proposition to the brand’s promise.
- This is the rock that needs the pressure to produce the program diamond.
- A program’s proposition must be a proof point of a brand’s promise. The brand and the program are peas of the same pod.
- Clarity on brand vision will lead the way to loyalty program vision.
- Following this, if a program proposition can solve customer pain points, it will last longer. Find problems to solve. If you can’t you are not digging deep enough.
(I have developed a formula to uncover these problems and it’s proving to be an ahaa moment for those brands prepared to dig a bit deeper and leading to more powerful program propositions).
5. Platform (Technology): No clarity on how a program can integrate with their existing technology infrastructure.
- While this is one of the more common obstacles, retrofitting a program into an existing technology infrastructure is not the optimal solution (remember the off-road vs on-road cliche above).
- There are more loyalty solutions which seamlessly and cost-effectively integrate into existing technology infrastructure available today than ever-before.
- Start by preparing a detailed technology requirement specification. Then open up to exploring the technology landscape.
6. Profit: No financial rigour to prove the performance of a program and its net return on investment over the longer term.
- Arguably this is the "Monopoly Moment" (‘do not pass go, do not collect <$?>’).
- The inflection point of a program seeing the light of day is developing a dynamic loyalty program financial model that caters for changing inputs and reflects relevant profit and loss, cashflow and balance sheet.
- The more I am involved with loyalty programs of all shapes and sizes, the more important the financial modelling of a program becomes.
- Proving program profitability over the longer term will overcome all the above obstacles.
The good news is, there is specialist expertise available to do this.
In summary, for those brands with no loyalty program who are not convinced a loyalty program is right for their business and for their customers, there is always a way to overcome any (all) of the obstacles as outlined.
While healthy scepticism is ok, an open mind and a growth mindset are better.
Have a happy loyalty day!
[1] The Obstacle is the way: The Ancient Art of Turning Adversity to Advantage
