3 steps to design and launch a successful, modern loyalty programme

Designing and launching a loyalty programme has been one of the most exciting and rewarding projects I've ever tackled. From navigating the complexities of data integration to fine-tuning the mechanics of customer engagement, every step has been a lesson in perseverance and innovation.

A successful loyalty programme brings many values to the business. It attracts new customers, and drives repeat purchases. In addition, the first-party data gathered from the programme is a goldmine, helping us improve the targeting in paid media and offer personalised experiences in other communications and eCommerce channels.

However, creating a modern loyalty programme is true brain-acrobatics. It also requires extensive collaboration across various functions to ensure that technology, data, and operations are aligned and ready.

Having reflected on my experience designing a loyalty programme from scratch, I want to share the “3D Process” I created and used to bring a loyalty programme from the strategy whitepaper to a fully operational one. I will also delve into key deliverables at each stage and the key stakeholders you need to engage and achieve alignment with.

3D PROCESS - A TESTED PROCESS TO DESIGN AND LAUNCH A LOYALTY PROGRAMME?

The 3D process includes three key steps: Defining, Designing, and Developing.?

STEP 1: DEFINING?

This initial step is pivotal in laying the groundwork for developing a comprehensive loyalty strategy and programme.?

At this step, loyalty leaders must first articulate the strategic purpose of the programme and outline the business objectives it aims to deliver. Defining the strategic purpose is to answer the 'why' behind launching a loyalty programme, and the answer will shape the proposition, mechanics, and features of your potential programme. It is critical to secure alignment on the strategic purpose with senior and C-level executives because it will provide clarity on strategic direction. It is also important to collaborate with the Finance team so the business objectives of the loyalty programme can be laddered up to the broader business objectives.?

Furthermore, it is critical to work with the Analytics or Customer Insights team to conduct a thorough diagnosis of customers’ behaviours and competitors. This will facilitate loyalty leaders to identify the primary target customers, pinpoint what behaviours need to be influenced to achieve the business goals, and set the stage for crafting points of differentiation.

STEP 2: DESIGNING

This phase focuses on establishing the core foundation and essence of a loyalty programme. Loyalty leaders must develop a concise loyalty strategy that clearly identifies the priority customer segments and outlines the programme's objectives. It is critical that the programme’s objectives can be laddered back to the business goals from the “Defining” stage.? Similar to the "defining" stage, this strategy and its objectives must align with the Finance team and senior business leaders.

Following the strategy, a clear value proposition needs to be crafted to explain why customers should choose your loyalty programme over competitors’. I recommend that loyalty teams consider the creative aspects or visual identity of their loyalty programme at this juncture, because a distinct and compelling creative approach can set your programme apart and attract customers effectively.

In addition, loyalty leaders need to design loyalty mechanics and its features. This includes determining the process for customer enrollment, devising methods for earning and redeeming rewards, and establishing appropriate thresholds for reward accrual and redemption. I would like to highlight the importance of addressing the economics while designing the mechanics, as the return on investment modelling will significantly influence the design approach. A successful loyalty programme has its mechanics anchored in economic viability!

Designing is an incredibly important stage that requires a lot of rigour and enormous cross-functional collaboration. In my next article, I will share key principles and best practices for designing a successful loyalty programme.?

STEP 3: DEVELOPING

This stage is very exciting as we move from the strategic planning phase to its actual implementation! The foremost question that both the loyalty and technology teams must address is how to build the loyalty programme infrastructure. For instance, which loyalty or CRM platform should be integrated to realise the programme's objectives and support its long-term goals?

In addition, the loyalty team must build a robust communication plan at this stage. Loyalty leaders must strategise both customer-facing and internal communication initiatives to ensure alignment and engagement across all stakeholders.

As I wrote before, a critical role of a modern loyalty programme is the collection of first-party data and the generation of customer insights. To accomplish this, precise and thorough data tagging and tracking mechanisms must be established beforehand. Therefore, collaboration with relevant teams is very important at this stage to ensure seamless data flow into reporting, and analytics.

In a following article, I will explore the Developing stage more in-depth.

ENABLERS

Enablers are activities that fall outside the direct remit of the loyalty programme, but are pivotal for the success of a loyalty programme. For instance, in the retail and hospitality industries, the Operation team plays an important role in the overall loyalty experience. Therefore, it is important to engage with the Operation team early on and get their support. Again, I will explore this aspect in an upcoming article of this series.

FINAL THOUGHTS

As we wrap up this article, I'm reminded of the countless hours spent navigating the complexities of data integration, fine-tuning engagement strategies, and collaborating across various functions.?

Designing and launching a loyalty program isn't just about creating a system of rewards and incentives - it's about building lasting connections with our customers, and driving driving growth. It's also a mindset of putting the needs of our customers at the forefront of everything we do, and this is a cross-functional effort.

I hope the 3D process provides you clarity on various deliverables and which stakeholders you need to engage with. Thank you for joining me on this adventure. I look forward to continuing our exploration of loyalty programme design and operation in the articles to come. Until then, keep innovating, keep inspiring, and keep building meaningful connections with your customers!