The operational demands of a loyalty scheme can generate a disproportionate cost, thus undermining the overall business objectives.
Loyalty operations must be cost justified like any other business operation. Having the greatest customer proposition is only part of the picture. Loyalty operations when implemented correctly can magnify the loyalty effect of a scheme, conversely it can destroy the very customer relationships that the organisation seeks to enhance.
In the vast majority of assignments undertaken by LCUK, our team is present beyond the launch stage, mentoring the management team as they get to grips with what is often the single biggest customer initiative that their company has ever undertaken. This underlines a need that is most often overlooked; day to day operation of the scheme brings about many challenges that in many cases have not been prepared for.
A loyalty scheme is a very public commitment to the customers and potential customers of a business. It is planned to have a magnetic effect, attracting new customers whilst retaining the existing base. However, the operation of a scheme can bring very different results.
Organisations who plan to operate a customer loyalty scheme must ask themselves:
- Do you treat all customers equally?
- Have you identified which customers have the potential to be the most profitable?
- Do you understand the triggers and drivers that positively influence customer behaviour?
Some organisations refer to ‘a customer journey’, as the most desirable customer outcome based on their optimum experience of their services or products. This could be true, but there are many other possibilities. The journey may address discreet product propositions that are a ‘light touch’ in respect of customer interaction or more complex ones such as personalised customer services. What is important is the identification of a win-win scenario that delivers mutual success.
The customer journey can be defined for different customer types suggesting how every customer can benefit from the full range of your products and services. Confirmation of the optimal ‘customer journeys’ will lead to the most desirable and logical ‘Loyalty Treatment Strategy’ that encourages the customer to ‘take the journey’.
It is therefore the case that the development and launch of a loyalty scheme is the beginning of a requirement to imbed an evolving loyalty operation into the entire range of customer service interactions and processes.
Having helped to specify, implement and run loyalty operations, we have a deep understanding of loyalty that goes beyond pure strategy. We provide a services model to accommodate a range of strategies from a simple short term mentoring role through to a fully outsourced loyalty service.
We are happy to live with our recommendations and are passionate about delivering the benefits we identify within a recommended strategy and business case.
At the heart of any successful loyalty programme is the ability to communicate with customers in a relevant and meaningful manner. This means understanding what messages to target customers with via which communication channels – direct mail, email, SMS, social media, phone or in-store promotions. With so many interchangeable variables, the opportunity for a campaign to incorrectly address the needs of its intended audience has never been so great, and this can potentially lead to disenfranchised customers as well as poor marketing investment decisions.
It is essential that in the communication process your organisation focuses on learning about customers, understanding their motivations, likes and dislikes and building these ‘learnings’ into future campaigns so that they offer as much relevance as possible to the consumer.
At LCUK we recognise the complexity of the customer communication process. We specialise in identifying a communications strategy that is consistent with loyalty objectives, underpinning the customer journey and maximising the ROI. This typically leads us to question and recommend improvements to your internal marketing communications processes and frameworks to strengthen the overall loyalty effect for your organisation.