6 Reasons Why Global Loyalty Programs Should Think Local
It’s nearly 15 years since the first truly global loyalty and channel incentive programs were launched. But today program managers are conceding that the constant desire for global standardization has reached an inflection point where there still needs to be a high level of local customization. This is despite procurement and finance departments thinking that even more efficiencies can be derived from global program operations resulting in year on year cost savings.
Without doubt, efficiencies have materialized over the past 15 years that make global programs very cost effective. The incremental resources required to deploy a program in a new geography far outweigh the costs of launching and operating separate programs (and the need for multiple agencies to operate them). The areas that have witnessed the most dramatic improvement in cost reduction are global data management, reporting, IT infrastructure, audit and compliance and global account management.
However, at Motivforce, our experience in operating numerous global channel incentive programs across hundreds of countries shows that local customization is required for the following six factors:
1. Product Focus
The product mix and focus often changes between countries and regions. The focus of products in a mature market is often very different to that of a growth market. Therefore, successful global B2B loyalty programs will have customised product and points tables to reflect the business focus of the company in each region.
2. Currency adjustments
Managing currency fluctuations is an important element and over the past 15 years we have seen major challenges in some countries who used the USD as the standard global currency for allocating points and reward redemption. Some countries have mitigated this by deferring to local currency
3. Taxation, anti bribery and local laws
These vary in many countries and have a considerable impact on program operations in order for the program to remain compliant. Taxation obligations in European countries vary as they do in Asia and North America.
4. Local cultural considerations
The way we engage, communicate, and the rewards we have on offer must be cognizant of cultural sensitivities. What is perfectly acceptable in a westernized country can be seen as inappropriate in a Muslim country for example
5. Language, communications and customer service
As we aim to make programs more personal for individual participants by identifying and applying behavioral analytics, we need to engage effectively at local level. This requires local language support, bespoke local communications and customer service support to drive the success of the program.
6. Pricing Parity
Purchasing parity that a program participant enjoys in their local country affects the number of points awarded for product sales and learning activities as well as the value of the rewards on offer. Co-employment laws are common in many countries and would be triggered if participants earn greater financial benefits from loyalty programs compared to their monthly salary.
So, whilst it is important to continue driving the global cost efficiencies of loyalty programs, there is no doubt that local customization is here to stay.