Having determined in ‘The Fine Art of Loyalty’ that loyalty is a strategy that needs to be carefully planned, now we come to delivery, where again a considered approach is needed to ensure effective and pragmatic execution of these carefully crafted plans. As previously discussed, the loyalty machine is a complex mix of many moving components and these need to be delivered coherently so that the whole becomes greater than the sum of the parts.
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With loyalty, the devil is in the detail when it comes to delivery
Treating loyalty planning and implementation as a transformation exercise, even for a major refresh of an existing programme, means that we need to carefully consider the key transformational components; typically people, process, technology, data and even culture.
Daunting as this may seem, and any loyalty initiative is not to be taken lightly, breaking down the tasks into key areas to address may help.
With loyalty, the devil is in the detail
Delivery
Plan exponentially, execute incrementally
A constant challenge for loyalty programme managers is proving the value from the programme, whether that is revenue attribution, ancillary sales, cross sell, etc., which are all addressable with a loyalty programme platform. At the same time launching a programme is cost heavy, not just on strategy, planning and technology, but also training, communicating, and marketing. In addition to these upfront CAPEX and OPEX costs often there is also a considerable cash flow impact, where loyalty points are involved as they get booked as a P&L cost when issued to the balance sheet as an asset, but only come off once redeemed or expired which then may take several years to achieve a dynamic equilibrium between ‘Earn’ and ‘Redeem’ volumes.
CFOs and indeed CEOs therefore might commit to a long-term loyalty strategy but the programme will be under pressure in the short term to show indicative results at least, the green shoots that show metrics moving in the right direction towards results.
Planning for these smaller incremental milestone achievements, not just in delivery but in tangible commercial results as quick wins or short-term proof points will help avoid the long-term strategy being blown of track, even if that means chasing some initial tactical wins at the expense of longer-term capability development from the outset.
As with all aspects we have shared this is a fine balance to achieve and will always be relative to the specific nature of your business, stakeholders, and market opportunities. We can only share the frameworks and areas for consideration as generic, the template will be completed differently for each and every client that needs our help in planning and delivering their loyalty strategy and success.
Plan exponentially. Execute incrementally.
Empowering your people to deliver
At a flick of a switch a backend system can be cut over to a new operating model, and marketing and advertising can launch new campaigns, customer-facing apps and websites. However, achieving a change in customer experience across tens of thousands of front-line staff is an entirely different prospect, needing a human-based not technical project management approach to change.
Loyalty programmes can mean a whole new level of service – and a completely different way of thinking, especially for frontline staff, who will be given a new platform for engaging and communicating with customers. Whether asking for membership cards at the till, or using membership data to identify customers from the moment they come onto your premises, you’re adding a new facet to their job and if they’re not bought into the reasons for change, the process, the technology and the importance to customers, and the business then it is likely the programme will fail to deliver in its most important interface customer interface, your people.
But it’s not just frontline staff who will be affected, all employees will need to be taught to think differently when the programme is in place. For example, back or head office staff could be sitting on pockets of customer information, selling distressed inventory on the open market that could be offered to valuable customers as a benefit, or operational opportunities to use customer data to prioritise service or service recovery when things go wrong.
Achieving this type of change needs management by the experts, to identify the audiences, understand the impacts, communicate the need for change, train people in the new processes and manage and monitor the outcomes deploying retraining and refreshers as needed to course correct.
That is assuming of course you have the right resources needed for loyalty in the first place. Typically, one area that is overlooked is the impact on customer services. We have seen that launching a programme can bring a 4% increase in contact rate as customers start to query balances, benefits and rewards etc. So, the number of resources, skills, training, tools across all aspects of programme delivery needs a considered and effective plan.
Empowering your people to deliver
Planning for transformation is enterprise wide
Understand the ‘as is’ as well as the ‘to be’ state
Too often businesses engage agencies and strategy consultancies to look to the future, to find WOW and innovate to achieve a revolution and step change, but they are missing the first step, which is to truly understand and evaluate where you are today. Time spent understanding current performance, opportunities, assets, challenges, and threats is well spent. Building long-term sustainable strategic differentiation in loyalty comes from identifying unique, valuable, and intrinsic opportunities that can be leveraged from with the current core operating model; Air Miles only exists because airlines had empty seats in the first place. Similarly defining the future needs rigour, not so much in the detail but in the principles or critical success factors. Understanding these strategic pillars, for example the power of recognising top customers with a timely thank you, and testing them in the short term allows for the programme design to evolve towards what works, without overly defining the final programme specification at the get go. And while some CTOs might despair at this approach the reality is most of today’s leading loyalty systems have flexibility and configurability to adapt. Provided you avoid the architectural mistake of hard coding loyalty programme rules into the data, or worse, infrastructure layer of the tech stack rather than keep them flexible in the application layer on top.
Combining these two states ‘as is’ from an audit and discovery phase with ‘to be’ from a design phase means then we can plan which pieces of capability to move forward when for the delivery plan.
Understand the ‘as is’ as well as the ‘to be’ state
Create a North Star vision, balanced with quick hit shorter term deliverables
When getting your loyalty programme up and running, it’s critical to have a North Star vision, perhaps somewhat over the horizon as an idealistic future target state. It doesn’t need to be defined to the Nth degree as its task is to encapsulate the purpose of the programme and its possible future state – therefore setting the overall ‘direction of travel’, not detailing every step to get there. Along with this comes a North Star metric – a key customer-based goal that demonstrates how the needle is moving. For example, Facebook tracks active weekly users showing its reliance on user generated content, and Uber the number of completed trips showing the performance of its rider, passenger matching model.
But while planning for that long-term goal most businesses also need to deliver short-term evidence and proof points of the strategy, whether that is as a proof of concept or proof of value test or defining a starting point to develop further from in the form of a Minimum Viable Product. This way the investment in loyalty can have early quick wins that supports the ongoing development work and concept testing can inform the viability of the strategy.
Combining these two time-based approaches means creating a phased roadmap, ideally with themes so that all stakeholders can see what you are trying to achieve at each step, with the detail only provided for the current delivery phase and planning into the next one aligning to an overall agile approach.
This a balance of both long-term and short-term goals to helps ensure stakeholders and delivery teams are onboard with both the overall direction and the next step in the journey. As Sun Tzu said in The Art of War “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat”, hence the need to do both together.
Create a North Star vision, balanced with quick hit shorter term deliverables
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Here are five tips for getting that fine balancing act just right
People
Which is the resourcing levels, skills, abilities, mindsets, location and to a certain extent the tools they will use. Ensuring the right people with the right abilities are available and matched to the programme delivery requirements at each stage is often the hardest task, and potentially the longest lead time, even more so than systems availability.
Process
Often overlooked but core to making clear what’s needed and when for the programme to work is a clear process that is planned, documented, communicated and ready to use for training.
Technology
This needs to be an enterprise-wide view of the end-to-end technical ecosystem, not just a component project defined to source and stand up one element no matter how critical that single solution is. Architecting end to end not only avoids mistakes in delivery but also helps spot opportunities for process improvements, people changes and other impacts that can benefit from a revised technical ecosystem.
Data
The lifeblood of loyalty programmes, the somewhat outdated statement ‘data is the new oil’ shows how critical it can be to digitally based businesses, and more pertinently perhaps also a ‘toxic asset’ that is hard to collect, store and manage safely especially in the GDPR governed world we live in. Therefore, data strategy including governance, processes, collection, analytics, dissemination, and execution is key right from the get-go to ensure you are building on the strongest foundations regarding both data capacities and compliance.
Culture
One of the hardest things to change. In customer centred businesses sometimes, this means breaking habits of ‘just being nice’ to customers, with no accountability of costs or targeting discretionary spend, as much as getting people to treat customers like loyal members. Also orientating a business towards actions based on data driven insights from loyalty, rather than how it has been done before, is difficult. Consistently we see pricing and yield decisioning processes using historical product data only without looking at the customer data as well, for example “who purchased these products?”, to inform price elasticity and the demand curves. We can’t over control and dictate all aspects of a business, therefore cultural change is the only way to empower and support teams in doing the right thing, the right way for the right customers.
Planning for transformation is enterprise wide
People
Technology
Culture
Data
Process
We have already discussed that loyalty is a strategy not a just a tactic and therefore its success comes from a deeply imbedded part of the overall business strategy, designed to contribute and deliver where only a customer engagement programme can, like the generation of critical business insights from customer level data.
Achieving this type of change is not one dimensional and typically includes:
Time to Delve into delivery
Acquiring customer data and sustaining customer loyalty for long periods is a never-ending challenge that every business faces. While most consumers are members of more than 12 customer loyalty programmes, they are active in less than 50% of those programmes. What makes some programmes more successful than others and how do you make your customer loyalty programme one of those that people use, share and talk about?
At Collinson we work tirelessly with customers to unlock the magic within their business, to design build and deliver the best loyalty programmes that set them apart from their competition and drive desired change – more mindshare, wallet share, advocacy, and Loyalty.
To learn what we’ve done for businesses like yours and how we can leverage Salesforce loyalty management technology across Customer 360 to help you achieve your customer vision and bring your loyalty strategy to life, please get in touch.
Collinson
About Us
Having a North Star vision combined with a real understanding of the current status quo will set a direction of travel underpinned with pragmatism. Planning for transformation across the entire enterprise and empowering people cannot be under-estimated as ‘super-powers’ for success. And perhaps the finest art of all is balancing investment with payback, with quick wins along the way providing the proof that your long term strategy is on track to deliver greater returns.
Combine vision and planning with pragmatism
Awny Elafghany
Head of Sales - Middle East & Africa
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