The Intricacies of Loyalty Program Design

A plethora of choices!

Would you inform me, please, which approach I must go from right here?

That relies upon a very good deal on the place you need to get to, mentioned the Cat.

Alice In Wonderland

Loyalty program design is a deeply concerned train fraught with selections. Many choices. Tough selections. No proper or incorrect selections!

On this three-part collection we take a look at essentially the most vital selections a model crew must take when designing a loyalty program. Be forewarned there are not any clear-cut solutions – what we are trying to do is spotlight the important thing points on which selections have to be made.

On this first installment we take care of two particular areas of planning:

  1. Setting Targets
  2. Defining a Worth Proposition

Setting Targets

Too usually not sufficient thought is given to the clear ARTICULATION of goals. It appears apparent proper? “I’m launching a program as a result of I need to retain my clients.”

Not so easy in actuality.

A discovery interview course of with key stakeholders inside the organisation will usually make it appear to be the loyalty program is a magic wand that may resolve all enterprise points in a flourish.

What we have to convey to the method is

  1. Focus
  2. Readability


What’s the single-most necessary deliverable for this system? This takes numerous dialogue, much more introspection. What’s the single purpose you’ll attribute to program failure if not achieved? Is it retention of your finest clients? Is it driving progress amongst your current clients? Is it driving higher profitability from a sure buyer phase?

CLARITY comes if you LAYER YOUR OBJECTIVES. Construction your goals as:

  • BUSINESS OBJECTIVE – What does the enterprise need to obtain? (There could also be many, however what can loyalty deal with)
  • LOYALTY OBJECTIVE – What does the Loyalty Program must do to attain the enterprise purpose?
  • BEHAVIOURAL OBJECTIVE – What particular buyer behaviour do it is advisable drive so as to obtain the loyalty goal

It additionally helps to ARTICULATE your goals clearly. A sensible device to make use of is the WHO, WHAT, WHEN, WHERE HOW MUCH.

  • WHO are you concentrating on? What phase/s?
  • WHAT would you like them to do?
  • By WHEN does this need to be completed? (One yr?)
  • WHERE does this need to be completed? (Any particular channels?)
  • HOW MUCH must be completed? (A focused quantity for improve, lower and so on)

Defining a Worth Proposition

“The issues that make me totally different are the issues that make me, me.” Winnie the Pooh

A Worth Proposition is a Assertion of Goal. It’s the purpose WHY clients ought to be part of your program.

The secret’s to reach at a holistic proposition that

  • Displays the model values
  • Appeals to the rational
  • Appeals to the emotional

Arriving on the worth proposition is once more a course of involving numerous iterations and dialogue. And articulating the identical is an equally concerned course of. Take the effort and time to do that accurately and the remainder of your design will slot in place like an exquisite jigsaw.

Some helpful tips to bear in mind when defining the proposition:

  1. Probably the most holistic proposition combines HARD BENEFITS and SOFT BENEFITS
    • Laborious advantages seek advice from “financial” and extra tangible rewards – factors, provides, reductions, sweepstakes and so on. They supply RATIONAL worth. They’re nearly hygiene in a program – and bear in mind they are often simply replicated.
    • Tender Advantages are the softer and extra intangible choices – particular service, unique entry, privileged invites, extra enhanced and seamless buying expertise and so on. They supply EMOTIONAL worth. Tender advantages are what’s going to actually differentiate your program model from others. The texture-good worth can’t be over-emphasised on.
  2. Additionally it is necessary to STRETCH PERCEIVED VALUE. If you give a reduction or coupon or a present certificates, the worth is clear and, within the member’s thoughts, is the same as the worth provided. A ten% low cost is a ten% low cost. If you provide particular companies (e.g., a Limo drop to the airport for a top-tier frequent flyer), the worth within the member’s thoughts is way, far higher than the fee to the model. If you allow movie star entry (Meet your hero), no value might be placed on the providing. So, embody a set of unique, hard-to-price provides. The worth boosts this system will get from these is immense.
  3. DELIVER ASPIRATION – That is just like stretching perceived worth. It additionally implies that you test together with your members on their aspirations and embody these provides. Have the “troublesome to realize” rewards that members will aspire for and accrue their foreign money. Which suggests they follow your model! Curate rewards which can be personalized and never obtainable off-the-shelf. Have a set of experiences which can be aspirational – e.g., Redeem your factors for an Everest Helicopter Tour in Nepal.
  4. HAVE A LARGER CAUSE – Whereas this isn’t necessary, it’s what’s going to make your program keep the course. Remember Gen Y, Gen Z and Gen Alpha’s psychological framework and social consciousness. To resonate with this viewers, packages might want to transcend the transactional. Don’t power match a social trigger into {the catalogue} – like a charity redemption possibility. Take the trouble to hyperlink this system to a deeper, bigger trigger – and it’ll repay handsomely in goodwill and stickiness. Members who need to depart this system will then assume twice as a result of it means leaving the trigger they’re affiliated to as properly.

Observe these easy tips, have a structured method to worth proposition constructing – and that’s the most effective basis your program can have.

In regards to the Writer

Mala Raj is a Licensed Loyalty Advertising and marketing Skilled™ and school member of the Loyalty Academy™. A Administration post- grad from IIM Bangalore, she is an skilled loyalty advertising practitioner having labored for over 20 years within the discipline throughout shoppers, audiences, and verticals.

Mala has designed lots of the profitable loyalty packages operating in India immediately. She has authored analysis on Loyalty in addition to been a jury member for Loyalty Advertising and marketing awards in India and internationally.

She might be reached by way of and +919821041171.

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