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Getting the Bang for your Loyalty Program Buck—Part II

Identifying the Details of the Loyalty Program

After setting a high-level loyalty strategy, a retailer should then customize the key components or “the guts” of the loyalty program. Conceptually, this involves specifying key parameters that detail how the program will function. The principal program aspects that need to be determined include program structure, layers, fee structure, loyalty tier/status features, and corresponding promotional segmentation. This easy step-by-step approach can be utilized to assist retailers in the program engineering process:

Step 1—Define the Core Loyalty Program

  • Set a comprehensive central strategy for how rewards are established, earned, redeemed, and expired. Consider some common program structures, such as Automatic Rewards, Bankable Points, Discounts, Product Frequency, and Visit Frequency.
  • Note: Your program should closely align with brand image and emphasize the elements that differentiate you from competitors.

Step 2—Identify Core Loyalty Program LayersLoyalty Program Circle

  • Choose further benefits to be offered on top of the core program for enhanced customer connection (i.e. Birthday, Membership, Special Pricing, Charitable, Surprise/Delight, etc.).

Step 3—Determine Core Loyalty Program Fee Structure

  • Will program participation be free or fee-based (i.e. Sam’s Club, BJ’s)?
  • Note: Ensure that your product type and customer base are considered in making this decision.

Step 4—Decide Core Loyalty Program Tiers and/or Loyalty Status Structure

  • Select criteria for how customers are awarded loyalty status, including tiers and number of tiers (i.e. Gold, Silver, Bronze), tier minimums (in $’s or points), loyalty status requirements, etc.
  • Identify the reward structure for the program – what does the customer get for the points earned and what is the reward ratio (i.e. 500 points = $5 coupon).

Step 5—Determine Core Loyalty Program Promotional Segmentation and Communications

  • Which other offers will be layered on top of the base program to induce purchases? (i.e. coupons, double points, contests, visit challenges, we miss you offers, etc.)
  • Which promotions are sent to which customers? How are offers kept relevant and easy to understand? What effectiveness measures will be used to gauge promotional impact and what is finding traction among various customer groups?

For the final post in this series, see Getting the Bang for your Loyalty Program Buck—Part III.

Post by John Eagles and Laura Sossong

John Eagles2About John Eagles, Vice President
John has experience in both retail and restaurant as an executive and consultant. He has held executive positions at Bradlees Department Stores, Ames Department Stores, and Papa Gino’s Pizzeria and D’Angelo’s Grilled Sandwiches. He specializes in strategy, POS, merchandising and mobile solutions. He has consulted on a wide range of retail and restaurant enterprise applications, from selection through implementation.

 

 

Laura SossongAbout Laura Sossong, Management Consultant
Laura is an experienced individual with core competencies in merchandising and retail strategy, product optimization, technological innovation, and team training and restructuring. Her efforts have been instrumental in the execution of various organizational strategies and solutions. She has effectively introduced and implemented initiatives for American Eagle Outfitters and MGM Resorts International, among others.

Getting the Bang for your Loyalty Program Buck—Part I

Looking Through 3 Lenses for Best Program Strategy

The paramount importance of the consumer experience in today’s retail space cannot be denied. Customer satisfaction and customer loyalty literally go hand in hand with one another. Now more than ever, technological advancements have granted retailers an ocean of opportunity in which to interact with and build loyalty amongst their customer base. But how does a retailer navigate through the plethora of possibilities when formulating the loyalty program that’s right for them and their customer base?

By putting themselves in the shoes of both their customers and their employees, retailers can gain significant insight into the loyalty mechanisms that will prove to be most advantageous. Considering not only how the plan will be defined, but how it will be administered and communicated at the point of sale is vital to the process. Additionally, being realistic about organizational strengths and weaknesses will ensure the loyalty program chosen is both feasible and achievable.

Successful loyalty programs are planned from multiple perspectives.

Through the customer lens:Looking through lens

  • Which program will best resonate with your customers to compel them to participate?
  • What type of program fits your customer’s expectation based on their relationship with your brand?

Through the employee lens:

  • What kind of program are your employees best and most efficiently able to execute from an operational perspective?
  • What program will make your employees feel passionate to promote to your customers?

Through the company lens:

  • What customer communication mechanism is necessary to carry out your intended program?
  • What program will help you achieve your company’s financial goals?

For more on the topic, see Getting the Bang for your Loyalty Program Buck—Part II.

Post by John Eagles and Laura SossongJohn Eagles2About John Eagles, Vice President

John has experience in both retail and restaurant as an executive and consultant. He has held executive positions at Bradlees Department Stores, Ames Department Stores, and Papa Gino’s Pizzeria and D’Angelo’s Grilled Sandwiches. He specializes in strategy, POS, merchandising and mobile solutions. He has consulted on a wide range of retail and restaurant enterprise applications, from selection through implementation.

 

 

Laura SossongAbout Laura Sossong, Management Consultant
Laura is an experienced individual with core competencies in merchandising and retail strategy, product optimization, technological innovation, and team training and restructuring. Her efforts have been instrumental in the execution of various organizational strategies and solutions. She has effectively introduced and implemented initiatives for American Eagle Outfitters and MGM Resorts International, among others.

Chanel and Neiman Marcus continue Dallas celebration with store window display

LUXURY DAILY – As French fashion house Chanel’s time in Dallas came to an end, the brand decided to leave a lasting impression with an exclusive window display in Neiman Marcus’ flagship store. Includes quotes from Laura Sossong, consultant for Boston Retail Partners.

http://www.luxurydaily.com/chanel-and-neiman-marcus-continue-dallas-celebration-with-store-window-display/

WEBINAR REPLAY: The ABC's Of Delivering A Superior Customer Experience

RETAIL TOUCHPOINTS – So what are the best ways to enable store associates to deliver a superior customer experience? This webinar will outline 5 ways retailers can win the battle for brand loyalty and long-term success. Features insights from Ken Morris, principal, Boston Retail Partners.

http://www.retailtouchpoints.com/component/k2/the-abc-s-of-delivering-a-superior-customer-experience