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Customer Loyalty Programs Need Partners, Not Providers

tags Loyalty Programs

Brands using high-priced platforms often find that the provider lacks know-how to drive the required shifts in shopping behavior or sales. What they need is a partner experienced in loyalty marketing.

Let’s cut to the chase: Technology vendors are unintentionally crippling loyalty.

They have the right intentions, but once a program is launched, they forget about you – just like your first romantic experience. It still stings, I know.

This mentality is directly responsible for the trail of failed programs and brand-side frustration we see today. The industry is inundated with overly sophisticated technologies that can be set up and forgotten.

But loyalty is more than an overpriced platform. Loyalty is the constant and meticulous evolution of customer behavior, incremental financial viability and consumer experiences. It’s not sexy, but that’s how successful programs are cultivated.

To understand how to create a more successful loyalty program, we should first take a look at the current state of loyalty.

The Current State of Loyalty

These days, loyalty falls victim to a few prominent issues that decrease success for brands and for customers:

Many providers stack the deck against loyalty programs from the start because they’re egregiously expensive. They burden brands with overhead, throwing the delicate balance of financial viability into a tail-spin.
Brands using those high-priced platforms often find that the provider lacks know-how to drive the required shifts in shopping behavior or sales. More worrisome – those elements are critical to offset heavy sunk technology costs.

As a result, brands end up falling into the same promotional trap that got many to their current level of dismay in the first place. In short, it’s setting the program up for failure before it even launches.

Brands are also barebones these days. Their structure isn’t set up for effective loyalty marketing and management. Teams are slim, with few resources to analyze, strategize and execute. Perhaps even more importantly, their counterparts are just as strapped as they are.

Analytics, creative, IT and digital teams are all overutilized and often hanging on by their fingernails. When do they make time for loyalty? It needs exacting and thorough management across functions, and that lack of resources presents major challenges to brands. That’s where brands need partners, not platforms.

If marketers did some soul-searching, they’d see that providers simply are not partners. They offer expensive technologies, but they have no experience in loyalty marketing – you know, the heart of the program. That’s where brands really shatter loyalty. They’re trying to prove an unwieldy ROI because of costs, and they quickly find out they’re too strapped to give the necessary resources to the program. They need help.

Yet their loyalty provider can’t help once the program is launched. They’re flabbergasted by customer analysis, they stab in the dark on strategy and they throw their hands in the air on execution. Not a great start. These programs have all the accessories, but they are soulless husks of what they could be with experienced partners in loyalty marketing.

The All-Important Customer Experience

Technology providers do win – on paper – with customer experience. They can check off the boxes, showering customers with complex technology features, fancy scenarios and personas. But there are two major issues with long-term success:

Brands are unique; their tools should be, too. Major loyalty providers are purveyors of the same product, no matter what your brand sells, or what the customer base responds to as members. Each brand has unique problems, goals, styles and customers. Product offerings can’t be mundane and standardized. With major providers, brands pay for many options they won’t use, while being frustrated with the ones they will.

Customer experience isn’t static. Customer expectations change like the wind. It’s maddening trying to keep up with customer sentiment, channel development and content. But the answer is hidden in member data, not the technology. Loyalty partners experienced in program management can easily identify those expectations through behavior analysis and customer feedback.

What’s paramount is that they can provide insights and personalization opportunities to keep members happy and keep those Net Promoter Scores up.

Customer Behavior and Financial Viability

From engagement to transactions, customer behavior analysis is the heart and soul of any successful loyalty program. There is a constant evolution of customer action, analysis, behavior shift and incremental gain. That pattern is taking place across all segments of members. It’s an intricate network of events requiring extensive management.

The challenge for most retailers is that such a meticulous pattern of analysis, strategy and measurement is not only extremely time-consuming, but it requires a high standard of knowledge and experience. Add in member acquisition and financial viability, and they’re looking at an insurmountable mountain of work, which leads to strategies being produced without proper guidance and tactical insights. There’s a reason brands have to hunt for incrementality. If technology providers don’t know where to look in the first place, good luck.

When marketers look back at the trail of wreckage left in a provider’s wake, lack of fact-based insights and financial viability are usually the key culprits. Even more shocking: Some technology providers would look at you like a deer in headlights if you asked them about customer insights and ongoing management.

That’s the difference between a technology service and marketing. That’s the difference between a provider and a partner.

Partners Over Providers

Loyalty has so many juxtapositions depending on the lens we look through. Yes, loyalty is about customer engagement, but it’s also about brands going out on a limb for their customers. Likewise, loyalty shouldn’t just be brands placing their faith in agencies. Agencies need to demonstrate that, from insights to execution, they have the best interests of the brand at heart.

Today, loyalty’s evolution requires partnership – a team that empowers brand-side marketers through insights, strategy and financial guidance. If you want to build brand loyalty, pick a partner, not a provider, and watch your customer relationships grow.

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