How can you ensure your loyalty program is financially sustainable?

The relationship between sustainability and loyalty is somewhat understated. For years, the concept seemed to be used either in niche circles or as a convenient buzzword for companies to use to appear progressive.

Set clear goals: Set specific goals for the loyalty program, such as increased sales, customer retention, increased purchase frequency, etc. Know the financial objectives that the program must achieve to be sustainable.

The main objective here is to understand the goal of having a loyalty program: Is it to improve engagement? Is it to find new cross-sell opportunities? Is it because your market is saturated, you need to create a program to make customers return? Just few examples....the answers should involved the "What" "When" "How" "Why" With that, you can create your business plan and determine how you will measure your loyalty program.

Establishing goals for your business and loyalty program is essential to know what you can offer and what your customers will want. This is a great starting point when making your loyalty program financially sustainable.

Surveys and feedback: Conduct research to understand customer needs, preferences and expectations. Request constant feedback to adapt the program based on customer feedback. Data analysis: Use transactional and behavioral data to identify patterns and trends. Implement data analytics tools to understand how customers interact with your brand and channels.

Analysis of direct and indirect costs: Identify all costs associated with the loyalty program, including rewards, administration, technology, communication, marketing, among others. Differentiate between direct costs (directly related to the program) and indirect costs (related to other processes or activities). Clear budget: Establish a clear budget for the loyalty program and ensure that it adheres to the business's financial objectives. Plan to allocate resources efficiently to maximize return on investment.

In my experience, when loyalty programs fail, and too many do, it is because they fail in delivering sufficient value to the members. - Make sure that a membership adds real value to the different segments of your customers. - Find areas where you can offer assets of real value at a low cost to your company and its partners. - Don't use it as just another sales channel.

Clear Value Proposition: Communicate clearly and transparently what benefits customers receive when participating in the loyalty program. Highlight the tangible and intangible rewards that set the program apart. Rewards Aligned with Customer Desires: Make sure the rewards you offer are desirable and relevant to the target audience. Consider surveys and feedback to adjust offerings to customer preferences.

Know your competitors Your loyalty program should stand out from the crowd and differentiate your brand from competitors. You need to research and evaluate travel and tourism industry best practices and trends, as well as your direct and indirect competitors' loyalty programs. You also need to innovate and try new ideas and features for your loyalty program, such as gamification, social media or partnerships. By knowing your competitors, you can create a loyalty program that offers a unique and compelling customer experience.

Partnerships, especially in the travel industry, work ell since people usually need to rent a vehicle or mode of transport on top of catching the flight. It becomes a win-win situation for all parties involved.

In my experience, a loyalty program needs to offer a clear benefit to the customer/member for them to consider it. Additionally, ensuring you find areas where you can offer benefits at a low cost to your company is crucial to having this be financially sustainable.