The first step in starting a loyalty program is in getting executive buy-in for the initiative. While some companies consider loyalty programs to be a standard, others can be more reluctant to begin a program of their own; concerns like cost, ROI, getting strategic and operational know-how, and staffing can be a deterrent. If you're looking to build a loyalty program for your brand, you can succeed in getting buy-in by putting the right effort and attention into key aspects of your proposal. While the actual a loyalty program proposal will be much longer and more detailed, here are a few tips to help set you on the right path:
First Question To Answer Is Always ‘Why?’
Why do you need a loyalty program? Why now? Why chose this particular strategy over another one?
This is where you really need to do your research and be specific. For example, while it’s true across the board that higher customer loyalty contributes to organizational success and that loyalty programs are a pivotal component to increasing customer loyalty, chances are your team might not take that at face value. You will probably need to dive a little deeper into the benefits to help explain your exact reasoning for why a loyalty program would be beneficial for your exact organization. Conducting specific industry research and competitor analysis will help provide support on why loyalty programs work for your sector or your customer base.
Identify Program Purpose And Goals
Chances are you didn’t decide to start a loyalty program on a whim. You most likely have particular goals or accomplishments you’re looking to meet, and a loyalty program is part of your plan to get there.
In addition to tying your program to company goals, identify what your program goals are: increasing customer loyalty is an all-encompassing goal, but you can get more specific. Do you want to improve your customer retention rate? Acquire new, higher-quality customers? Drive customer engagement? Increase the spending and purchase amounts of specific customers segments? Whatever your goals are, be sure to illustrate how your loyalty program will contribute to your success.
Outline Key Metrics And Analytics
What is the ROI? Is another big question your team will have.
Come armed with a list of main loyalty program KPIs. Outline their definitions, how to measure, and what the numbers mean for program and company performance. Show not only how you will measure performance but the actionable plans for responding to different situations that might arise based on program numbers, both good and bad. This shows you have considered the risks and have a plan to continue growing program performance or mitigating any issues.
Identify Key Risks And Challenges
Some of these challenges can include:
- Time - while every program is different, they do require some time, both for program build and to start seeing results.
- Money - budget is always a concern. It can be hard for some companies to justify the investment and ongoing costs a loyalty program can require.
Tips To Strengthen Your Proposal
Advocate For Value
Value is important to today’s customers. Price is a factor, but so many other items also contribute to how, where, when, and why a customer decides to buy. Loyalty programs have the potential to offer multiple levels of customizable value for your customers. While one sector of your customer base might enjoy free shipping, another segment might appreciate exclusive first access to new releases, or another group might want free items. A loyalty program lets you appeal to all customer types.
A loyalty program won’t only benefit you and your team. They can also positively impact the efforts of other departments, such as branding, sales, marketing, and more. Understand how loyalty programs can influence these other organizational sectors can help you approach coworkers for stakeholder support and insights.
Connect Loyalty To Company Goals
A well-designed loyalty program should always reflect and support a company’s goals. You can make your case stronger by connecting your proposed loyalty program to your company's existing goals and metrics. For example, if your company is looking to drive awareness of it’s new charity initiatives, show how loyalty programs can be a good fit to allow customers to donate via earned points.
If you're in the process of creating a loyalty program proposal or searching for a potential vendor after having your proposal approved, we'd love to talk! Reach out to us today to learn more about how we can help your brand build better customer loyalty.