When my daughters were younger and a certain project or task they were undertaking didn’t turn out very well, I’d try to make light of it by jokingly saying, “A for effort….E for execution!” This became a sort of family catch phrase and years later we still haul it out from time to time whenever someone has an epic failure of some sort and have a good laugh.
As much as the expression may have just been a light-hearted way to make the girls feel better when things went wrong, the expression is extremely valid in my professional life to this day.
Loyalty and reward programs are all about execution. A company can try to structure the best program in the world, expend gobs of money and time developing it, but if they don’t get the structure right or operate the program properly, it is all for nothing. Program execution is the #1 factor in determining a program’s success.
Many times when cold-calling people about our reward program services, I’ll hear “Loyalty program? Oh, we tried that before and it didn’t work”.
Well, the person may truly believe the program didn’t “work” but the reality is they didn’t properly “work” the program and 9 times out of 10 it’s simply a matter of them having put together a program format that is completely wrong for their industry/category or not understanding how to execute a program effectively.
Program execution can be greatly enhanced by avoiding these common pitfalls:
- Lack of reward attainability– Make sure the majority of customers can reasonably expect to derive value from the program. If program earning requirements are too far-fetched, people will not even bother to enroll and you’ll launch a program no one will use, incurring operating costs without the benefit of sales to drive ROI.
- Concern About Reward Costs– Many companies worry their program will be too successful and result in huge #s of rewards (and associated costs) being earned by their customers. This is upside down thinking. All rewards should be tied to specific sales activities and the company operating the program should be setting the offer values to reflect the value of the associated sales activity – so ROI on the reward cost should always be excellent. No purchase? No reward. Raiquenewscasho You want to be issuing lots of rewards because this means your customers are making lots of purchases and if they are making lots of purchases from you, then they are not buying from your competitors.
- Complicated Structure– Is the program easy to understand and use? Review the program mechanics and terms with a control group of customers in a soft launch before rolling out to everyone. If you get too many questions, consider delaying launch and re-work content.
- Irrelevance– Are the program offers relevant to the user? Be sure to use historical customer transactional data to structure offers that make sense and are aimed at filling purchasing gaps or reinforcing existing behavior.
- Generic Offers– Some offers are fine to make across the board but there are usually many different types of customers and customer segments or ‘buckets”. Are your customers segmented in order to target them with logical offers and incentives for their customer type?
- Low Awareness– Be sure the program is well communicated to the customers so it becomes and remains top of mind – or is at least on their radar. Your customers are BUSY! They get hundreds of emails a day and open less than 20% of them. Don’t assume the one email you send out announcing your reward program will be opened, read and understood by a big % of your customers; the opposite is true. Be sure to incorporate something about your program into as many customer touch points as you can. It costs you nothing to add a mention to things you’re already doing. Your customers can’t be influenced by your program if they don’t know about it.
- Lack of Sales Team Engagement– Ensure your sales team is trained to use the program and regularly updated on program bonus offers and success stories to ensure they leverage the program when calling on customers. Provide them with each account’s reward activity to use as an additional influencer in sales calls. The sales team is often the customer face of the program, so they need to be engaged and “on the bus” so that they can use the program to make an impact on sales.
Good intentions and hard work are only half the battle when it comes to running a successful loyalty program; proper program execution is what will truly determine how successful the program will be.
By Graham Farrell – President, Lift & Shift Loyalty Programs