Think about the last team meeting you had with your Marketing group. The topic of the day is the status of the brand’s loyalty program.
By: Mala Raj
As the discussion goes deeper, concerns are voiced from all corners of the room (or the video call):
“Only 10% of the base is ACTIVE”
“Members are not ENGAGED with the program”
“REDEMPTIONS have been low for the past six months and more”
“The last campaign got very few click- throughs and even FEWER RESPONSES”
While your issues may be different, you get the drift. The conversation that follows turns it focus on solutions to these problems. The remedial measures broached span the range of challenges:
“How do we get members more INVOLVED with the program?”
“Members need to see more VALUE”
“The VALUE PROPOSITION has become stale… it needs to be ENHANCED”
Suddenly, there is revelation:
“Hey – how about we rope in some partners? It will tackle ALL OF THE ABOVE”
And therein ends the discussion. Patting each other’s backs for the break-through idea, the team gets set to establish a feet-on-street task force to enroll partner brands in the program.
Jump forward a few weeks and, with a group of partners recruited to add stimulus to the program, the team is crafting copy for the next campaign. Here’s how it reads:
“Here is a set of WONDERFUL OFFERS from the following brands JUST FOR YOU” …. 25 brand logos to choose from
“Now EARN XYZ POINTS at the following partners too…” ……. 6 brand logos
“Special festive offer for you – NEVER BEFORE DEALS” …… 13 brand logos to choose from
“Renew your membership and pick from a set of SPECIALLY CURATED OFFERS” …. You have to click on several logos for acceptance before you get to renew.
I’ll admit to over-simplifying the planning process — it is surely more strategic and detailed in practice, but the fact is I have witnessed many loyalty program managers resorting to partner selection as an almost-default method for revitalizing their programs.
Enlisting value from cooperative and complementary partners is a great idea, but it’s the thought that goes into their selection that needs improvement. Are you asking all the right questions? For instance:
- Have you completed a thorough analysis of your data to understand which member groups are in fact disengaged with the program, and to what extent?
- Have you queried your valued members to know WHY their enthusiasm diminished? What areas of pain did they encounter? What friction should be removed? What expectations were missed?
- Have you considered other ways — more innate to the brand (service, recognition, privileges, benefits) — that will drive member engagement levels higher?
- If you already incorporate external partners in your program, have you measured their visibility by Members and whether offers are being converted? For those offers that are converted, are you experiencing any operational issues? What’s working and what is not?
The truth is, if partners are the panacea, they were portrayed to be in your planning meetings, then you should be investing time to make the best selection possible of the optimal strategic partners. Did you vet the categories, verticals, brands, and models of engagement that best suit the overall goals of the program?
In the Indian market, an active one for Customer Loyalty, I have seen a plethora of programs of late featuring partner offers. Partner offers are used in conjunction with campaigns for enrolment, renewal, or tactical earn and burn, and festival options. Unfortunately, it’s often the same partner brands that pop up across multiple loyalty programs. This represents a strong acquisition play for the partners, but does it create the best offer for the brand’s loyalty program?
The bottom line is that partner decisions need to be strategic — even if tactical in execution! Partner brands need to have synergy with the program brand — and with the member profile. And relationship agreements need to be drafted carefully so that the move is viewed truly as an enhanced value proposition that adds value to the member.
No one wants to be accused of lazy design, more importantly everyone wants their program to deliver top value to Members. Taking time to analyze every aspect of partner selection goes a long way to ensuring your loyalty program will hit the mark.
Mala Raj is a consulting partner at Strategic Caravan based in Mumbai. She has over 28 years of experience in Media Planning, Direct Marketing, CRM, and Customer Loyalty.