Remember how quickly companies moved quickly to re-invent their business models and commit incremental resources toward customer-centricity during and after the pandemic? While many recovered, we still see others shutting down after years of struggle as they could not regain their competitive edge. Importantly, investments in customer-centricity and branding, loyalty design/strategy, creativity and innovation must be explored to win in tough, competitive markets.
Today, more than ever, is the right time to take a hard look at your loyalty program performance.
Loyalty program owners, CMOs, CFOs, and customer experience owners should reflect on these questions:
- What is the value of an audit?
- What must it cover?
- What are the priority constraints we must overcome to lift program ROI?
- Who is best suited to lead an assessment of our loyalty program?
- What are the key metrics and operational considerations that must be addressed and what is the demand on resources and/or partners to get the job done right?
- What does success look like after performing a loyalty program assessment?
- Based on the results and key findings, how do we best prioritize a transformative change in our operating model in order to get the biggest benefit and lift in program performance both near and long term?
To help answer these questions, Ascendant Loyalty, a global CRM/Loyalty consulting firm focused on helping customer-centric companies efficiently and effectively improve customer retention and drive growth profitably can provide the answers you need!
Why is now the right time for an assessment of your loyalty program performance?
Consumer behavior has changed since the COVID-19 crisis. Access to goods and services has become much more digital. Program members have had their traditional patterns turned upside down. Inflation continues to hurt demand and influence price sensitivity.
These factors influence brand preference, frequency and share of wallet. Change has caused a reevaluation of long-standing affinities. Convenience, paid programs, free shipping and exclusive reliance on one co-brand card to dominate spend/achieve more valuable rewards are just some of the changes we’ve observed over the past several years.
Points are not as important as experiences that are personalized and meaningful. A low value proposition via hard benefit isn’t enough to make a member “turn right vs. left” in choosing one brand over another.
Unfortunately, layoffs and staff cuts have impacted the very core of the brand marketing organization that was empowered to nurture lifetime value.
We see these dramatic changes every day. This new world order should give you reason to pause and assess the strengths and weaknesses in your loyalty program. With change this dramatic, now is the time to audit your loyalty or customer-centric commitments in order to lift your return on marketing investment.
What should trigger concern for a loyalty program owner or senior executive that has their eye on loyalty program performance?
You should consider auditing your loyalty program when:
- There’s a significant drop in the return on investment (ROI) of the loyalty program and it’s not easy to determine the root causes
- The positive gap between member and non-member metrics is shrinking
- Enrollments driving new member acquisitions have slowed and are not hitting financial model projections
- When was the last time you looked at your financial model and compared projections to actual?
- The positive margin on member average transaction is shrinking as the program has fallen into promotion excess, giving away both discounts/deals plus points to a broad (vs. targeted) segment
- Engagement metrics are trending down: Fewer social posts by members, a lower rate of response to surveys, weak referral rate, lower CSAT scores from members, lower open/click-thru rate on emails, and lower penetration of preferred forms of payment
What should you expect from the loyalty program assessment?
An assessment should enable you to achieve a much stronger competitive position by being able to plan, execute and measure program performance. Likewise, you may find that there are opportunities to improve your margin on goods sold, improve your enrollment rate, re-energize your store associates, lift response to program offers and source tools, solutions, and platforms that have an even better feature/ functionality for running your program than you have in place today.
Ascendant Loyalty knows and understands technology providers at global scale (better than Forrester, Gartner and other analysts or Big 4 consulting firms who have never built, run or managed a program). We can help source the right partner at the right price:value that has the feature/functionality and long-term roadmap to best meet your needs.
The assessment should help you identify strong and weak points of your loyalty program and give you clear recommendations on what to change and fix in communications, technology, staffing alignment, offers/promotions, store associate training, program operations, rewards, and UX/UI.
What’s important while doing an audit of a loyalty program?
LoyFor most companies that have some form of recognition and rewards program in place, daily, weekly, and monthly reporting on program performance is enough to know whether the program is driving business metrics profitably. This assessment should be reliant on the business case originally built to justify the program, including – but not limited to – the program’s financial model.
Success is defined by pre-established measures, or KPIs (key performance indicators). We also recommend a quarterly audit with your service providers to assess how well they are supporting your business objectives. This allows you to identify areas for improvement and determine what the near-term priorities should be to meet/exceed commitments to the enterprise, especially by driving incremental profitable return from your valued program members.
If interested, we are glad to provide a free two-hour workshop to help you get started on a path to improvement. Contact ALM for Free Audit.
