Six steps to launching a new loyalty program

Oct 9, 2019
4 MIN. READ

Loyalty is a well-established marketing discipline that has saturated almost every consumer sector. In fact, brands that do not offer a program often stand out more than those that do. The benefits of a program are obvious: Increasing brand affinity, driving incrementality, and collecting one-to-one transactional data all allow marketers to be smarter, less reactive, and more efficient.

But with programs becoming so ubiquitous, no brand wants its program to exist as just one of many in the “sea of sameness” that so often defines programs in a single vertical. And this challenge can be compounded when a brand is last to market within in its category.

Launching a program from scratch in a crowded market is a unique and exciting challenge. And it presents tremendous opportunity for the brands who are willing to be inventive and diligent in their approach to entering the fray.

These six key takeaways can help brands that are new to the loyalty party launch highly successful programs:

1. Study your competition deeply and learn from their successes and mistakes.

It’s important to take a good look at the programs your competitors have in market. For any program design effort, you should try to understand the mechanics, structure, and promotions that make up the programs with which you will compete.

Of course, taken together, these elements of your competitions’ programs represent the features that drive success in the market. These are important to know. But when you are late to the game, you also have the unique advantage of studying what went wrong for these brands. Dig deeply into the history of how their programs evolved and any changes they made, whether in structure or communications, and you will get a sense of potential pitfalls to avoid.

2. Make a splash with your design and your launch.

As a newcomer to the loyalty scene in your space, the design of your program is going to have to offer features and benefits that help it stand out from the pack. This is a given if you are going to maximize the reacquisition of your lost (but formerly best) customers.

Focus on grabbing attention away from the competition with bold promotions and rich initial offers. Create a splash early, but be cautious about dropping off right after launch. Try to sustain the energy of the launch for a lengthy period, and then ease into your regular program structure and offer cadence.

3. Ensure the essence of your brand is not forgotten.

Far too often, brands launch programs that offer great benefits, points, prizes, and utility to the consumer but that stray from the heart of the brand’s promise or purpose. These programs deliver a measure of success, but they don’t capitalize on the goodwill and love that customers associate with the brand.

This is an easy pitfall for a brand launching a program in a crowded space. Balance the program’s rewards with design and features centered on the aspects of the brand that customers already love. And it’s important to offer perks, access, and rewards that are deeply tied to the essence of the brand itself, and to the experience a customer has when interacting with that brand.

4. Prior to launch, focus on employee training.

If there is one thing you don’t want to hear a front-line employee say about your program, it’s “check out our new rewards program. It’s like Competitor #1’s program, but …”

As your brand rolls out its new program, it’s critical to focus on how well your employees understand its ins and outs. In addition, it is just as important to ensure your employees are deeply versed in the program’s messaging, promotions, and structure—that they become true ambassadors of your loyalty strategy.

Finally, be sure to inspire your employees with the program. Help them see how the program might make their jobs easier, drive more business, or help them serve their customers better, both of which can lead, for example, to bigger tips or commission. Consider allowing your employees to participate in the program. The program shouldn’t be viewed as just one more thing they have to remember. It should be something they are excited to talk about with customers.

5. Expect your competitors to react (quickly) and be prepared to adjust.

While your competitors may have taken some of your customers when they launched their programs, don’t expect them to readily give up these customers. Be prepared for your competition to adjust their programs or offer healthy promotions to respond to your program launch. In turn, you should also be prepared to adapt.

6. Be patient, and give the program a chance to build critical mass.

Ultimately, a loyalty program is a long-term play that requires organizational commitment. While there will likely be initial successes to celebrate, don’t expect the customers who left when your competition’s program launched to come back right away. It takes time for a loyalty program to build out a strong ROI.

The real benefits of the program will accumulate with time and are highly dependent on marketers’ abilities to leverage the loyalty channel to drive business results. Over time, the deep one-to-one customer understanding developed within the program will allow you to develop and propel the business.

ICF’s global marketing services agency focuses on helping your organization find opportunity in disruption.
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