Would you be surprised to know that poor management is one of the major reasons for loyalty programs failure? You shouldn’t. If you take a look at some of the successful loyalty programs that didn’t do well as expected, you will find that poor management is among the biggest causes behind the dismal performance.
What is Loyalty Program Management?
Loyalty management is all about the use of strategy, tools, and tactics that a company uses to acquire, engage, and keep hold of loyal customers.
It helps in targeting the right audiences and offering them the best possible experiences, benefits, and rewards with the intent to drive long-term engagement.
Apart from a loyalty program, an all-inclusive loyalty management platform includes an array of elements such as:
- Loyalty program construct
- Loyalty program optimization
- Technology enhancements
- Rewards and benefits
- Creative services
- Member acquisition strategy
- Member communication and marketing
- Branded customer service
- Billing engine
- Client services, etc.
All the above-mentioned elements require working together for a successful loyalty program. However, managing all these elements may take up a lot of time, resources, technology, and expertise. Due to this reason, a large number of retailers prefer outsourcing some of these elements to some experienced and professional loyalty management program.
Creating a loyalty program may be easy but managing it is very difficult. The multiple levels and multi-process nature of loyalty programs make management difficult. It takes considerable effort, resources, and commitment to analyze, structure, and manage loyalty programs.
5 Proven Ways for Loyalty Program Management
Here are five proven ways for effective loyalty program management:
- Define your goals
- Understand your customers
- Keep your loyalty programs simple and user-friendly
- Focus on regular communication and engagement with members
- Focus on regular evaluation and improvement
However, with proper planning, strategies, and partnership with the right loyalty partner, managing loyalty programs is easy. This blog post describes five proven practices to manage loyalty programs.
1. Define your goals
Defining goals is the first step that’ll help you turn your wants and desires into reality. Whether acquiring new customers, retaining them for a long time, raking in more sales, and registering more revenue, achieving all these will be easy when you set well-defined goals for your loyalty programs. While setting concrete goals for your loyalty programs, keep these in mind:
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Have a long-term and short-term marketing strategy in place:
When creating strategies for a loyalty program, focus on long-term endeavors for three to five years. Also, have a one-year marketing strategy for your short-term goals.
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Define your Key Performance Indicators (KPIs):
To define KPIs for your loyalty program, you should identify specific metrics aligned with team member objectives. The KPIs could include new customer acquisition rate, customer retention rate, sales revenue, customer satisfaction score, and average transaction value. Make sure the KPIs are relevant, measurable, and achievable.
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Assign operational activities:
After defining KPIs, it’s time to assign operational tasks for the loyalty program team. While doing that, be fair and identify the unique talents of each team member. Assign tasks based on team members’ expertise and strengths. Encourage open communication and collaboration among team members so that they can uninhibitedly contribute their ideas and insights.
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Determine the frequency and form of KPI reporting:
The last but most important point in the goal-setting stage is to determine the frequency and form of reporting progress on the KPIs. How often are you going to report the progress? Monthly or quarterly? Apart from that, allocate time to reflect and evaluate the results as well as identify areas for improvement.
2. Understand your customers
After defining goals, the next step is to understand your customers so that you can what they like and dislike as well as what’re their preferences and motivations. The best way to understand your customers is to conduct:
- Market research
- Surveys
- Interviews
- Social media analysis
- Purchase history
- Direct feedback
Now the question comes “Would customers readily give their data to businesses for better loyalty programs?” The answer is a resounding yes. As per a new Accenture study, eight out of every ten respondents are ready to share their data with brands if they get personalized experiences.
Even though these methods of collecting data will need you to invest some of your time, resources, and energy, they will provide considerable benefits in the long run. After you get the data, use it to tailor your loyalty programs, rewards, and experiences to cater to your customer’s needs and preferences. Collect regular customer feedback to make data-driven decisions and make continuous improvements to the program.
3. Keep your loyalty programs simple and user-friendly
There is great power in simplicity. To achieve the ultimate sophistication in your loyalty programs, keep things simple, realistic, and user-friendly. The advent of modern technology has made digital loyalty programs far simpler and easier compared to traditional loyalty programs.
A simple and well-designed loyalty program can mean all the difference between success and failure. While designing a loyalty program, make it easy for customers to enrol, earn rewards, and redeem them.
To ensure a smooth and intuitive user experience, streamline the program’s features and functionalities. By keeping things simple and user-friendly, you enhance customer satisfaction and increase their engagement with the loyalty program.
When it comes to rewards, keep them simple and transparent. Provide relevant and appealing rewards to your customers and avoid excessive restrictions or complicated mechanisms. Also, enable customers to view available rewards and monitor their progress.
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4. Focus on regular communication and engagement with members
Effective communication is the ticket to success. When it comes to ensuring the success of loyalty programs, nothing can beat the power of regular communication and engagement with loyalty program members through various channels.
Engage with them through personalized messages, social media, or loyalty program apps to maintain their interest and participation. Keep them informed about new program updates, exciting new rewards, and exclusive offers. Also, engage with them on a more personal level by sending personalized messages that resonate with their preferences and needs.
Leverage your loyalty program app and social media platforms to connect with loyalty program members. By doing that, you can elicit positive responses and active participation from the members and it will boost their loyalty.
5. Focus on regular evaluation and improvement
After completing all the above steps, identify areas of improvement and make the required adjustments to boost your loyalty program’s user-friendliness and simplicity. If continuous improvement is your game plan, then nothing can stop your loyalty programs from being successful.
Continuously evaluate customer feedback and program performance. While analyzing data, look for new patterns. By doing that, it would be easy for you to pivot your loyalty program to changing customer preferences or trends.
?Suggested Read: Effective Ways to Create Value from Loyalty Programs
All in all,
The difference between successful loyalty programs and unsuccessful ones is the way they’re managed. When businesses manage their B2B and B2C loyalty programs in the best possible manner, then nothing can stop them from retaining their existing customers and attracting new ones.
At LoyaltyXpert, we have not only designed and created effective digital loyalty programs for a wide range of businesses but we’ve also helped them manage and run their loyalty programs effectively and efficiently. If you are looking for a reputable and trustworthy loyalty partner not just to develop high-quality loyalty programs but manage them as efficiently as possible, then contact our team for a free demo
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