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3 Ways to Ensure a Smooth Loyalty Program Transition
Here's how to make sure you don't miss a beat—and that the changes are for the better.
Posted Dec 19, 2016
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It’s no secret that loyalty programs are an effective way to attract and retain customers. And with the average American household enrolled in 29 different loyalty programs, but only actively participating in 12, it’s becoming increasingly important to look at new loyalty solutions to influence consumer behavior, add value and ultimately, drive engagement among members.

To overcome inactivity and increasing competition, many are making changes to their loyalty programs—such as moving toward more flexible loyalty currencies, or shifting to spend-based  revenue models—to increase engagement and value for their members. However, when contemplating any change, it’s important to clearly define and understand why the change is being made and the results you’re looking to reach. Otherwise, you risk your members crafting that message for you. Take time to define your loyalty program objectives and tie them to measurable goals. Are you looking to increase the number of a times a customer interacts with your brand? Do you want to influence their purchasing behavior? Or do you simply want consumers to spend more? Being clear about what you want to accomplish and defining why you are making changes will help to clarify the benefits for your audience.  

Take American Airlines, for example, who recently changed the way it awards loyalty points by shifting to award miles based on ticket price. Or Starbucks, who made a similar switch by offering loyalty points based on dollars spent. Both brands were under significant scrutiny in the press following their decision to switch up their existing programs. And as a result, their customers reacted negatively before each had the chance to define their reasoning behind these changes.

It’s clear that making changes to an existing loyalty program has its fair share of risks and benefits. Oftentimes these changes are made to ultimately help you reach your program goals, yet you need to balance that with keeping the wants and needs of your program members top of mind. By following these three tips, brands will not only ensure their changes are for the better but also learn how to switch up their programs without missing a beat.

Get members on board. Before making any big changes to your loyalty program, you must first win the approval of program members. From asking consumers what they’d like to see in a new loyalty program to discussing how they earn and burn points, taking the time to gauge their wants, needs, and concerns will make it easier to implement a change that gets them excited about earning loyalty rewards.

Also consider mapping out new loyalty opportunities that closely match consumer preferences. The more time spent on getting to know the ins and outs of your members, the better the chance of developing ideas that appeal to them. Research the spending history and loyalty redemption behavior of your own program members, and take a look at competing loyalty programs your members are interacting with to discover what your members will actually want. And over time, you can begin making steady improvements to your loyalty program.

Be flexible in your offerings. There’s no limit to the number of ways brands and retailers can grow their loyalty program membership. But one tactic in particular—providing flexible loyalty offerings—helps cater to the fluctuating demands of potential and existing members. By giving your consumers choice and convenience in how they can earn and burn their rewards, you can quickly turn your loyalty program into a go-to destination to rack up and redeem loyalty rewards.

The truth is, loyalty currency is only as valuable as it is accessible. Therefore, as the ubiquity of loyalty increases, so will engagement between member and program. In fact, a recent study from Collinson Latitude found that nearly four out of five customers want the ability to redeem rewards more easily. Flexibility can mean more ways for members to earn and spend rewards, or even expanded opportunities to trade and exchange rewards between different loyalty programs. And brands should consider partnering with other programs across the industry to turn cross-brand or cross-industry redemption opportunities into a reality.

With more ways to redeem their loyalty points and miles than ever before, consumers will have greater incentive to shop with a brand even if they aren’t interested in that program’s loyalty rewards selection. Brands who introduce flexible loyalty currencies which enable consumers to earn and redeem loyalty miles and points across multiple loyalty programs will help increase engagement with loyalty program members in no time.

Communicate at every touch point. Once you’ve decided to make adjustments to your loyalty program, the next step is to over-communicate those changes with program members. From engaging with consumers at checkout to launching an email campaign that regularly sends updates, brands must keep consumers up to speed on their loyalty offerings. Seek out opportunities to communicate with your members through various touch points, and use these channels as an opportunity to highlight how specific changes to your loyalty program are more valuable for them.

Remembering what benefits each loyalty program offers is no easy task, especially when you consider the fact that the average consumer has more than 13 loyalty program memberships. Make sure your loyalty program changes are known, as you have a much better chance of attracting new members, and retaining old ones, when consumers know what to expect when earning and redeeming your loyalty currency on a regular basis.

When it comes to shaking up your loyalty program, it’s necessary to heed plenty of caution. The wrong move can quickly send your once loyal customers running to competitors. However, by taking in each consumer’s perspective, catering to their preferences, and spelling out the reasoning behind each change, you can ensure a smooth transition that will heighten engagement among current members, and make your program even more enticing to future customers.


Danielle Brown is the vice president of marketing at Points, the global leader in loyalty currency management. Via a state-of-the-art loyalty commerce platform, Points provides loyalty e-commerce and technology solutions to the world’s top brands to enhance their consumer offerings and streamline their back-end operations.

 

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