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Nine Point Checklist For Your
Loyalty Programme
• 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
recently, Communicorp.
• She has extensive international marketing experience,
having worked in Sweden, Finland, Jordan and
Central/Eastern Europe.
About the Author:
Nuala Canning
Executive Summary 1
Introduction 1-2
9 Point Checklist For Loyalty Programme 2-5
Subsections
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
2.7 Technology
2.8 Data Insights
2.9 Strategy and Communication
Conclusion 5
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
7. Technology
8. Data Insights
9. Marketing Strategy and Communication
Executive Summary
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:
Investopedia
•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
Introduction
“ “
• 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
data.
• 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
sales.
Introduction
Continued
Objectives of a Loyalty Programme
• It is important to have a clear objective for a
loyalty programme.
• 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
revenue?
• 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
on investment.
• 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
business strategies.
• Research provides an insight into your customers and their
buying patterns. In addition, market research can also
provide information on market trends and your
competition.
• 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
more.
• 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
programme.
• 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.
Lottery Licence
• 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.
Technology
• 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
programme)
• 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
programme.
• Media companies have also employed gamification
and second screen technology which rewards
customers for watching and sharing content.
Data Insights
• 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-
loyalty customers,
• 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
Communication
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.
Conclusion
• 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

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Brandfire 9 point Checklist for Loyalty Programme

  • 1. Nine Point Checklist For Your Loyalty Programme
  • 2. • 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 recently, Communicorp. • She has extensive international marketing experience, having worked in Sweden, Finland, Jordan and Central/Eastern Europe. About the Author: Nuala Canning
  • 3. Executive Summary 1 Introduction 1-2 9 Point Checklist For Loyalty Programme 2-5 Subsections 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 2.7 Technology 2.8 Data Insights 2.9 Strategy and Communication Conclusion 5 Table of Contents
  • 4. 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 7. Technology 8. Data Insights 9. Marketing Strategy and Communication Executive Summary
  • 5. 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: Investopedia •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 Introduction
  • 6. “ “ • 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 data. • 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 sales. Introduction Continued
  • 7. Objectives of a Loyalty Programme • It is important to have a clear objective for a loyalty programme. • 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 revenue? • Be clear about these objectives and ensure that they are aligned to the businesses.
  • 8. 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 on investment. • 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.
  • 9. 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.
  • 10. The Importance of Research • Market research helps businesses gather information that can be used for effective planning and implementation of business strategies. • Research provides an insight into your customers and their buying patterns. In addition, market research can also provide information on market trends and your competition. • In the case of a loyalty, research will also help you know your customers and what behavior you want to reward.
  • 11. 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 more. • 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 programme. • 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.
  • 12. Lottery Licence • 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.
  • 13. Technology • 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 programme) • 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 programme. • Media companies have also employed gamification and second screen technology which rewards customers for watching and sharing content.
  • 14. Data Insights • 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- loyalty customers, • 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.
  • 15. Market Strategy and Communication 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.
  • 16. Conclusion • 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