Nine Point Checklist For Your
• Nuala is the Managing Director at Brandfire.
• Having over 20 years’ experience in sales and marketing,
working in a number of industries including radio,
telecommunications and online.
• She has held positions in Esat Telecom, DCC and, more
• She has extensive international marketing experience,
having worked in Sweden, Finland, Jordan and
About the Author:
Executive Summary 1
9 Point Checklist For Loyalty Programme 2-5
2.1 The objectives of a loyalty programme
2.2 Developing the Business Case
2.3 Ownership and responsibility
2.4 The Importance of Research
2.5 Rules and Rewards
2.6 A lottery Licence
2.8 Data Insights
2.9 Strategy and Communication
Table of Contents
In this paper, Brandfire outlines 9 factors to consider when
planning or launching a loyalty programme.
These factors are as follows
1 The objectives of a loyalty programme
2. Developing the business case
3 Ownership and responsibility of the loyalty programme
4. The Importance of Research
5. The reward rules and rewards
6. A Lottery Licence
8. Data Insights
9. Marketing Strategy and Communication
Before we identify the key considerations in more
detail, let’s begin by defining a loyalty programme.
Below are only some of those definitions:
•Loyalty programs are structured marketing efforts
that reward, and therefore encourage, loyal buying
behaviour — behaviour which is potentially
beneficial to the firm. Source: Wikipedia
•A rewards program offered by a company to
customers who frequently make purchases. Source:
•A customer loyalty program is a structured and
long-term marketing effort which provides incentives
to repeat customers who demonstrate loyal buying
behavior. Source: About.com
• A more precise definition is that provided by
www.customersthatstick.com: “A loyalty program is a
system of structured rewards given to customers,
usually in exchange for desired behaviors, with the goals
of increasing customer loyalty and collecting customer
• Loyalty programs use the psychological principles of
reciprocity, commitment and loss aversion to increase
the likelihood of customer loyalty”.
• Despite all these definitions, the most important reason
for launching a loyalty programme is to capture data on
your customers and to use that data to drive increases
Objectives of a Loyalty Programme
• It is important to have a clear objective for a
• Is your objective to improve retention by
rewarding existing customers?
• Is the objective to win new customers, grow
revenue, and market share? Is your objective
to both to improve retention and increase
• Be clear about these objectives and ensure
that they are aligned to the businesses.
Developing The Business Case
• Once the objectives have been defined, companies
must build the business case around those
objectives. The business case will help determine
whether or not a loyalty programme justifies the
investment into a project and provides that return
• It can also look at possible alternative solutions.
Often overlooked, the business case provides a
check to ensure that the project aligns with the
organisation’s strategic plans.
Ownership and responsibility
of a loyalty programme
• A loyalty programme should belong to the entire senior
management team and must have everyone's buy-in. A
loyalty programme involves all departments.
• Finance will run the numbers and ensure that the programme
is on budget and delivering on the Return on Investment
(ROI). Information Technology and Information Systems will
manage the technology platform and integration into any of
the relevant in -house technology platforms. Human
Resources will educate and train staff.
• Marketing will be responsible for the communication and
data insights. Very often, a loyalty programme will fail
because of the lack of “buy-in’ within an organization.
The Importance of Research
• Market research helps businesses gather information that
can be used for effective planning and implementation of
• Research provides an insight into your customers and their
buying patterns. In addition, market research can also
provide information on market trends and your
• In the case of a loyalty, research will also help you know
your customers and what behavior you want to reward.
The Reward Rules and Rewards
• Reward rules determine what action a customer must take in
order to qualify for a reward. Transactional loyalty programmes
are very popular with supermarkets and retail brands. Customers
earn points for every €/£/$ they spend.
• Many loyalty programmes reflect the importance of the digital
world and social media. Companies will reward customer for
sharing content, uploading photos and engaging with the brand in
other ways beyond transactional.
• Other buying behaviours that reap rewards include payment by
direct debit, accepting e-invoices, payment upfront and many
• Rewards can be anything from cash-back to cinema tickets to
future discounts to exclusivity.
• They should reflect the type of business, frequency of purchase,
the value of that purchase and the objectives set out for the
• The success of a loyalty programme will be determined on the
relevance and value of a reward and how easy it is to earn and
redeem that reward.
• The specific reward that a company provides may
require that that company applies for a lottery licence.
• This is particularly relevant when a company rewards a
customer with an entry into an exclusive competition.
• If the customer must transact to participate in a
competition, for example: purchasing a product = entry
to a competition, and the winner is picked at random, a
lottery licence is required.
• What type of technology should be used to capture
data and reward customers? Service stations and
supermarkets tend to use points based technology,
which requires integration into the company’s epos.
(ex Image recognition used by Kellogg’s for loyalty
• Customers earn points when they take a photo and
upload the receipt onto their loyalty platform Once
uploaded, these can be exchanged for rewards.
• This technology provides a great opportunity for the
FMCG industry to consider a bespoke loyalty
• Media companies have also employed gamification
and second screen technology which rewards
customers for watching and sharing content.
• Loyalty programmes can provide great insights
into your customers and how they transacted
with your business. Examples of this data include
average spend by loyalty customers vs. non-
• average spend by the store; spend by age, gender
and location. Ironically, loyalty programme can
often provide “data overload”. It is important to
determine the most relevant data and why that
data is important to the business.
Market Strategy and
Companies need to tell their customers that they have launched a
loyalty programme and communicate it regularly. The marketing
strategy will determine how that communication is going to
happen. The marketing strategy must include:
• Naming the Programme
• The Branding of the programme
• The personality of the programme
• The way it will be communicated internally and externally,
(email, social media, through the line etc.)
Companies need to consider that promotion of a programme both
at launch and over the lifetime of the programme.
Again, many programmes fail to achieve their overall objectives
due to the a poor marketing and communication strategy.
• A loyalty programme can be a significant
investment both in terms of the finances and the
time required to plan, launch and manage.
• The success of any programme will be dependent
on effective planning and consideration for all
elements as outlined in this paper.
• Once this has been completed, companies can reap
the commercial benefits associated with a
successful loyalty programme