Launching a successful loyalty programme

I recently spearheaded the successful launch of Miele’s central loyalty programme in the Italian subsidiary. The programme dubbed “Miele Club” was an absolute novelty for the Italian market and well-received by the most loyal consumers. While pouring over the initial numbers of subscriptions, I found myself asking: What makes a loyalty programme successful? What makes a consumer stick to one brand? What is Loyalty Marketing?

What is loyalty marketing?

Loyalty marketing can be defined as the marketing aimed at making consumers loyal to a brand, cause or enterprise. It comprises every effort and strategy to convert a one-time purchase to a repeat customer. Loyalty marketing is central to the CRM strategy of any consumer-centric company. It is all about creating a habitual interaction with the consumer at multiple touchpoints.

How to plan for a successful loyalty programme launch

Launching a loyalty programme can be challenging for many reasons. There are many uncertainties such as, adoption rate, social media reaction, PR, etc. We don’t really know how our target will react and nobody likes a shitstorm.

So it is paramount to start off with the right foot, from strategy to execution. In this article, I try to identify the relevant pillars, that I have found instrumental to planning for a new loyalty marketing programme.

Steps to ensure a successful loyalty marketing launch

  1. Identify the needs of your target
  2. Write out your goals
  3. Benchmark competitors
  4. Identify and align all the stakeholders involved
  5. Anticipate objections
  6. Communicate with empathy
  7. Start small, and scale up

Identify the needs of your target

How do you target consumers for a loyalty programme? Think “needs”. By focusing on what a consumer expects from a loyalty initiative, it is possible to have a clearer picture of whom we are targeting. Do they seek cash and burn rewards? Or exclusive experiences? Perhaps, curated after sales services, outdoor events or special promotions.

Remember that your customer is already in your funnel because they had a problem in the first place and you had a “fix”. So think: what are their needs in terms of loyalty? Reasoning in this way helps us better characterize the particular exigencies our loyalty programme would address.

Needs can be at different levels. Maslow’s hierarchy of needs depicts a model of human needs. It can be a starting point and further requires consideration with reference to your customers. Generally, a loyalty programme would want to increase the sense of belonging to a brand. Some programmes comprise offers, and initiatives that push our target towards their self-actualization: If the reward points can be used on that once-in-a-lifetime vacation to a fancy dream location, then I (consumer) may feel more compelled to adher.

Maslow’s hierarchy of needs

Premium brands understand that their typical customer does not necessarily expect huge discounts from them (although that trend is changing also due to the pandemic). In fact, heavy discounting may tend to reduce the already high brand perception in the sight of the consumers. This is why it is crucial to determine what the consumer needs or expects from your loyalty programme. Your loyalty programme should answer to a consumer need. Try “selling” it to your marketing personas and focus on “why” they would (or not) want to sign up for your loyalty programme.

Write out your goals

After having identified the needs and the motivations of your target audience, write out your specific goals for your loyalty programme.

Just like any other marketing initiative, our goals must be clear, concise and measurable. I have found that the OGSM framework helps to identify goals and corresponding key performance indicators (KPIs).

Carefully list out your revenue goals, objectives of brand visibility, customer engagement, new members adoption rate, etcetera. Clear goals enable clear actions and map the road to a clear destination.

Benchmark competitors

The next step I would recommend would be a careful and thorough analysis of what others in your industry are doing.

Find out about similar programmes in your industry. Our competition usually knows something we don’t know and sometimes we can learn from them and improve on their offerings. In like manner, looking across to success stories outside your immediate business area can be a source of inspiration. A good place to find information about trends in loyalty marketing is the Bond Loyalty Report. It is an annual report on the State of Loyalty across differnt industries.

Identify and align all the stakeholders involved

Selling the concept to internal key opinion leaders is as important as marketing to customers.

Internal stakeholders can become your initial ambassadors. Or your first dissidents. May the odds be in your favour…

I am a fan of sharing ideas and I believe in the power of the team. Alignment with all stakeholders involved can force you to think outside the box, to see other points of view and to ameliorate your strategy adequately. So I thourougly recommend it.

There is usually a wealth of knowledge to be gained from the product teams, digital comms and sales force in terms of consumer behaviour. Aligning with the functions who are in direct contact with the clients will prove useful in spreading the word.

The contact center and call center agents need to be aligned on the benefits and offers of the programme; with the strategy and possible objections from the consumer. The goals for adoption or subscription should be shared and clarified before launch. This would enable them to assist customers in the best way possible thus, contributing to achieving the business goals.

So, I would say that sharing the novel concept and the possible evolution with internal stakeholders can help strengthen the weaknesses in your initial concept, dissuade objections and empower your people to answer in the best and coherent way possible to the needs of customers.

Anticipate objections

Objections are an integral part of sales.

In fact, overcoming client objections is one good sign of a sales person.

Likewise, adhering to a novel loyalty programme comes with spoken or unvoiced concerns from consumers.

Examples include:

  • I already have other reward cards, this is the nth one
  • The website crashes often so no need bother
  • It is not clear what I should do

It is good to anticipate objections that both internal and external stakeholders might have and to already begin to work on viable solutions.

Run simulations and forecast realistically on costs and impact, so you can answer to concerns of eroding margin, brand reputation or conflicts of interest from other departments.

Anticipate bottlenecks in a smooth user experience for your customers whether online or in-store, and actuate plans to mitigate the risks you identify.

ERPs can be a problem as well. So check on the technical side, that the instruments you have at your disposition do not represent a roadblock. And if they potentially do, be sure to make it clear to your team so expectations of effort and results are realistic.

Communicate with empathy

The success of a novel loyalty marketing programme is hinged on the communication. Empathetic communication.

Communicate at all touchpoints speaking to the needs of your customers.

Speak their language, underlining the main benefits they get from your loyalty programme. In true omnichannel fashion, remind them of why loyalty pays, particularly, why loyalty to your brand matters and is a must.

Communication with empathy also means putting the consumer at the center. So from concept to implementation, paying attention to the user experience on phygital channels. It has been shown that great UX correlates with sales conversions. So, every effort put into smoothening the UX and onboarding of new members can potentially make the difference on your KPIs.

Start small, and scale up

So, you have identified your customers’ needs, goals of your loyalty programme, aligned the relevant stakeholders, anticipated objections, and drafted a communication strategy that speaks to the heart of your customers.

Now, it’s time to kick-off.

Start small, and gradually scale up to full capacity.

Rather than deploy everything in one release, adopt a “test and learn” approach, asking for and evaluating feedback from your clients and users. This way, they feel involved and can look forward to improvements in their user experience.

An extra point could be to reward early adopters, as these would create buzz and expectation for future releases. Early adopters spearhead WoM marketing and extra incentives to “bring a friend” or “spread the word” could be hugely rewarding to your business goals.

To wrap it all up…

When developing a loyalty marketing concept:

  • Identify needs of your target and speak to them with empathy
  • Have clear and measurable goals
  • Avoid fluff, give real benefits and anticipate bottlenecks
  • Align all relevant stakeholders and overcome objections
  • Start small, and scale up incrementally
  • Reward early adopters

Do you agree? Please leave a comment below.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.