How to launch a consumer loyalty programme
Marketers are a busy bunch. And if you’re responsible for customer retention, the last thing you need is a loyalty programme that doesn’t perform. It needs to achieve the objectives you set for it, keep customers coming back for more, and deliver a return on investment.
How well you tick all of these boxes will depend on the research you put in before the roll out of your loyalty programme. But time isn’t always on a marketer’s side, which is why we've put together the ultimate guide to up a successful loyalty programme.
Read it, print it out, scribble all over it and use it to ensure your loyalty programme does what it says on the tin. This cheat sheet is designed to ensure the process is straightforward, stress-free and effective. But if there’s anything else you’d like to chat through with us, please don’t hesitate to get in touch.
1. Discuss budgets
The first step (before the research, implementation and roll out of a loyalty programme can begin) is to know how much money you have to spend. Perhaps this can come out of your existing marketing budget, in which case you can proceed on the basis of your own calculations. Or, you may need to request extra budget from your brand’s senior management team. If it’s the latter, it will no doubt be easier to secure the funds if you have a thoroughly researched and evidenced business case (see point six). But an initial indication of likely budget parameters is important, so that you can investigate loyalty programmes that are affordable to you.
2. Know your customers
While instinct is important, very few effective marketing decisions are made purely on the basis of a hunch. Relevance has long been crucial to overall marketing success, and you need to know what your customers want from a loyalty programme, what they will engage with, and what will successfully ensure their loyalty. Key questions to ask yourself – and your client-base – are:
- What are my customers’ interests?
- Which types of rewards are likely to motivate them?
- Which communication method are they most likely to engage with?
- What is their preferred redemption method?
Once you’ve gained these insights, you can devise the list of criteria that the chosen loyalty program must fulfil.
3. Set objectives and measurable targets
Savvy marketing departments already pay significant attention to their spend, to ensure any activity has a positive impact on their brands’ bottom line. When you set objectives for a new customer loyalty program, ask yourself the following:
- What does it need to achieve? e.g.
- X% improvement in customer retention
- X% uplift in customer satisfaction scores
- X% increase in new customer acquisition
- What is the timescale for these objectives?
- Who is responsible for monitoring or achieving these objectives?
- Are there any interim targets? e.g.
- Loyalty program launch collateral to be ready by [date]
- Loyalty program roll out completed by [date]
Once set, these should be referred to consistently as the loyalty programme unfolds.
4. Research the marketplace
Investigate the types of loyalty programs that exist in the marketplace, and then focus your research on finding the best one. This process shouldn’t be rushed.
Key things to look for include:
- An easy to use and fully responsive redemption site, for increased engagement
- A variety of rewards, to suit all customer demographics – choice is key!
- Provision of the most generous and exclusive discounts that can’t be found anywhere else (not even on popular discount sites)
- Proven success – has the loyalty program already reaped success for brands?
- Account management support, with everything from your loyalty comms to ongoing reporting.
Our research shows that customers, more than anything, want a simple and straightforward way of receiving loyalty benefits - so keep this at the forefront of everything you do.
5. Ask the right questions
Don’t just browse suppliers’ sites – speak to their teams to get a greater understanding of how the loyalty programme works, how helpful they’re likely to be, and if their scheme truly suits your needs.
- Prompt the provider to talk to you about some of the factors outlined above
- Elaborate upon the findings from your own customer research – can they evidence how their program will fit the bill?
- Ask for a demo – seeing is believing after all.
6. Build a business case for your loyalty programme
Armed with the findings of your research, build a tailored business case, which outlines:
- Which loyalty program you’ve chosen
- Why you think it will work for your brand
- How much it costs
- The likely return
- The due diligence you’ve carried out.
7. Pitch to your MD
Keep the business case succinct and impactful, and present it to your MD in person. Don’t rely on them to read dozens of pages of rationale. Stick to the facts, the bottom line impact of your proposal, and the urgency of your plan.
8. Sell internally
Before you roll the chosen loyalty programme out to your customer base, ensure you have buy-in from your own team first. The marketing department needs to understand the ins and outs of the scheme, how it works, why you’ve chosen it, what it needs to achieve, and the part they play in making it a success.
Also, think about any other people you may need to speak to, such as the team responsible for your website if you choose to link to the redemption site from your own domain. Ensure everything is in place and rigorously tested before you go live.
Any loyalty programme provider worth their salt is likely to be able to help you with this process, by providing redemption stats, brand specific assets, digital resources, marketing collateral and even someone to come along and explain it all.
9. Roll out – champion the launch!
Let your customers know about the loyalty programme, and don’t be shy in championing why it’s great! Too many brands keep their schemes relatively under wraps, choosing only to mention them when a customer is about to leave. But our own research shows this actually doesn’t go down very well with consumers at all.
Prior to your launch think carefully about your comms – the branding, the message and your communications methods. If your customer base is active on social media, for example, ensure you generate lots of conversation on these channels. If you’re targeting a more traditional or elderly demographic, letters may work best. If you’ve chosen the right loyalty program your new provider should be able to help you with this.
Keep talking to customers about the scheme too. Not only is there a chance they may miss the initial launch communications; they may also need a little encouragement or reminder to take part – something that brands also received praise for during our own consumer retention research.
10. Monitor performance
Think back to the objectives you set and the promises you made to your MD. If you’ve chosen the right loyalty programme, you’re more likely to reap a return from your investment. But you can’t take anything for granted, so:
- Monitor the performance of your loyalty program, in real time, via your scheme’s reporting tool
- Pay attention to the statistics that are generated from your email marketing and tweak your strategy moving forward for maximum cut-through
- Look for trends, e.g. the most popular discounts, and leverage the opportunity to fuel even further engagement
- Speak to your provider for support and tips on all of this, remembering also to raise any concerns or ideas for improvement
- Don’t be afraid of tweaking your communications to keep the loyalty program fresh and customers engaged
- Remember that, if you’re nervous about fully committing to a new scheme, many providers will offer a three month trial
For a downloadable version of this cheat sheet, please click the link below! Good luck with your planning - and remember that we're always here to help if you have any questions.