Better goal-setting can be the secret to your loyalty program's success
Throughout my career, I’ve learned that one of the most important things to ensure the success of a loyalty program is to have an alignment with your internal stakeholders. And the best way to do this is to have clear and solid goals for your program.
Here are three fundamental tenets to set concrete goals for your loyalty program.
1. Statement of symbiosis
Establish your program’s statement of symbiosis. The if/then statement. And sell it to your stakeholders, and get them to rally behind it.?
An example of this statement: If your program successfully engages your members both intrinsically and extrinsically, then your business doesn't have to always rely on extrinsic rewards (coupons, points, discounts), which will then helps with retaining your customers sustainably, and help the company's bottom line.?
The risk of not intentionally designing for that symbiosis is that loyalty programs become vulnerable to “push comes to shove” moments down the line—because businesses go through ups and downs. Especially with the economy continuing to be in a gutter, your loyalty program might be at risk of getting its budget cut.??
2. Tangible and causal results?
Mistakes I often see managers make when setting their goals:
(I) ???????????? ?????????? ?????????????????????? (???? % ???? ?????????????? ??????????)
E.g. 70% of our sales come from our members
It does not tell your CEO anything because you might be “cannibalising” non-member sales by converting unknown customers to members without actual growth in the overall sales.
(II) ?????????????? ???????????? ???????? ???? ??????-??????????????
E.g. Member basket size is 2x as large as non-members.
No shit, Sherlock. Of course, customers who stand to benefit from your program will be the same ones who are more likely to sign up for your program.
(III) ?????????????? ?????????????????? ???? ?????????? ???? ??????-??????????????
E.g. An average member visits 5x more per year than non-members.
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Same as (II). It’s a self-selection bias.
(IV) ?????? ??????????????
E.g. We acquired 70,000 members this year.
How many of those are existing customers but previously unknown because they’re not members? Do you grow total customer counts?
(V) ?????????? ???????????? ??????????
E.g. We have 10 million members!
It’s not about the size of your base. Accumulating dead wood is not good. How many of them are active and engaged?
What you need to do: Set proper experimentation to prove the causal impact of your program and not mere correlation.?
3. Ensure goals are existential—"need to have" vs "nice to have."?
Don't make these to be just your only goals:?
- Launch a new program?
- Winning awards?
- Because it's fun?
Loyalty managers must recognise that loyalty programs aren't a panacea to all business problems. Understand what's important for your business in the new year. Position how your loyalty program can help to achieve those goals. Over-communicate it. If your program’s goals do not create a business impact, then it’s not good enough.
May God's favour is on you and your program in 2023!
P.S. If you like this article, follow me on LinkedIn. I write and share insights on Loyalty, Marketing, and Customer Experience.?
CCMO FairPrice Group and MD NTUC Link | CMO meets CIO & CXO | Marketing Academy Fellow | Driving the Future of Customer-led Marketing and Innovation
2 年“Everyone has a plan: until they get punched in the face” – Mike Tyson. At that point in time, having a well though through original plan because even more important; as a base from which to pivot.
Systematic investing | Quantitative trading | Founder | Strategy | General management | Payments | Loyalty | Partnerships
2 年Well put, Henry Christian! I've realised that it's common for loyalty managers to mix up the need-to-have and good-to-have goals during the goal-setting process. I wanted to add that balancing the need-to-have and good-to-have goals for loyalty programs can be a challenging task. Need-to-have goals are essential for the success of a loyalty program and include things like increasing customer retention, improving customer satisfaction, and increasing sales. Good-to-have goals are desirable but not essential, such as creating a positive brand image or collecting customer data for marketing purposes. Another way to balance these goals is to have a clear understanding of your target audience and their needs. This can help to ensure that the loyalty program is tailored to meet the specific needs and wants of your customers, thereby achieving both the need-to-have and good-to-have goals. It's also important to regularly review and evaluate the performance of the loyalty program against both need-to-have and good-to-have goals, making adjustments as necessary. This will help to ensure that the program remains effective in achieving its objectives over time, and is often overlooked by loyalty managers.