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7 Key Pieces to a Seamless loyalty Program

By Claudia Infante, Director of Revenue Strategy, Margaritaville

Claudia Infante, Director of Revenue Strategy, Margaritaville

Quick! Do a mental count: How many loyalty programs do you belong to?  Credit card, Airline, hotel, department stores, gas stations, video games??

In the race to “own the customer” and of course, the data and perceived value that comes along with it, every business vertical has createdprograms and platforms that gratify the consumer and ensure they continue patronizing our businesses.  On the surface, all those points that appear on a customer’s balance are the result of some magic formula that accounts for purchases and spend and transforms them into value figures, exchangeable for goods and services. The reality is that this daunting task requires a series of systems, processes, and Human Resources that must connect and interface to ensure the program’s success. Here are 7 basic pieces to solving the programmatic loyalty puzzle:

1. Data ( clean data) - it isn’t enough to have a lot of data in your systems. Do a quick check: is the data clean? Accurate? Actionable? When was the last time you ran a validation test to verify? More importantly, are you using a Customer Relationship Management System (CRM) to gather all aspects of your customers profile (like name, email address, preferences, etc.)? If you were to create a loyalty program today, would you be able to identify your top 10% customers by revenue, volume, frequency or lifetime value? How many sources or systems are collecting this data, and do you know where all that is going?

"Invest on a data validation and appendage process before spending money on loyalty systems"

Pro Tip: Invest on a data validation and appendage process before spending money on loyalty systems. Once you understand the volume and value of your data set, your loyalty program will be much easier to design and calculate for cost of operation and ROI

2. Connectivity - at the core of all seemingly simple loyalty programs, connectivity is the one element that can derail any automation dream. When designing a loyalty program based on guest interactions (purchases, visits, engagement, etc.), it is crucial that all the systems powering the program’s elements then connect in the backend to drive the guest experience forward and provide insights on the program’s success and opportunities.Pro Tip:when looking for new tech solutions, make sureintegration is included as part of said tech solution’score product development roadmap.

3. Governance should be the cornerstone of all your data processes: from collection to access, to business rules and distribution of said information, all aspects have to be part of a well-designed and thought through process to ensure the integrity, security and usability of the data. Pro Tip: not all data is created equal. Consider enlisting the help of a data governance and privacy expert as a member of your loyalty team.

4. UX and UI- less is more, unless we’re talking about loyalty. The age of instant gratification and the influx of millennials to the consumer pipeline requires every application and service to be fast, secure and easy to use. Mobile first is not a fad, is a way of business and your customer care solutions must be on par with the times to be impactful. Pro Tip: invest in well-designed, mobile first applications and solutions that put the guest experience first: chatbots, voice enabled solutions and digital wallets are just the beginning. As tech and service continue to evolve, so must your applications.

5. Business Intelligence isthe unsung hero of most applications. From reporting to trends, the BI solution attached to your loyalty program will not only demonstrate the effectiveness of your strategies around performance (increasing visitation, frequency of transactions, life time value, etc.) but can also identify areas of opportunity in marketing, integration of products, services and high profit margin offers that can give your program the ROI edge. Pro Tip: make reporting a core component of your program and the center of your strategy meetings.

6. Security – with all the high-profile data breach cases surfacing in the last year and the myriad of information that has flooded the marketplace, consumers are ever more cautious when providing data to programs and verifying their activity, transactions and point balances. It is imperative to have clarity for your members in two areas: data protection and ways that their data is used. At the core of security, trust is paramount: consumers are experiencing data and loyalty program fatigue and the best policy is transparency and thoroughness. Furthermore, inititives like the General Data Protection Regulation (GDPR), an EU legislation and the soon to come in effect California Consumer Privacy Act will effectively change the way we do business and transact in data currency. Pro Tip: follow the trail of your data and identify the points of failure and design flaws that will inevitably exists in the plan and address them as you prepare to launch your loyalty program. You will thank your future self for taking the extra step.

7. Machine learning and AI –Loyalty programs have been around for over 3 decades and haven’t really changed much. While they generate high volumes of transactions for hotels and airlines, for the consumer, it is very much a numbers/points game. AI and Machine Learning have brought personalization to the loyalty landscape and is the way loyalty will be relevant to the next generation of consumers. Assuming you have checked the boxes on 1 through 6 above, this last step will close the loop on data and consumer engagement. Pro tip: don’t settle for traditional loyalty models. Create a program that challenges the status quo and evolves with the technology and customer behavior.

The last piece of the puzzle, and the most important one is multi-discipline collaboration. Technology is a cornerstone of any program, but it also depends on operations, marketing, finance, training and legal to be successful. Engage your counterparts in these areas early and discuss the effects of each step to their day to day functions, you may be surprised how much these conversations alleviate friction and save time in the long run.

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