Cost-of-Living-Crisis: Why you need to invest in your loyalty program to keep your customers Pt 1
Cost-of-Living-Crisis Part 1: Why you need to invest in your loyalty program to keep your customers
Just as the world began to see a light at the end of the Covid tunnel, along came the cost-of-living crisis, soaring energy prices, and a rapid rise in global inflation. It may not be on the same scale (yet) as the tsunami of the pandemic, but it is certainly creating tidal waves around the globe. This perfect storm is already causing challenging business conditions and starting to impact on customer spending. It is potentially the tip of the iceberg and will inevitably lead to customers making educated decisions about what they spend their money on as costs continue to rise.
That is why now is the time to make sure you continue to invest in your loyalty strategy. Rather than reducing focus and suspending elements of your loyalty program, this is the time for vigorous planning and innovative program design to ensure your customers still opt to buy your products and services.
A strong, focused channel, being rewarded and encouraged by their channel loyalty program will ensure that all opportunities are directed towards companies sponsoring a program. And, if there is a downturn in the economy as a result of the cost-of-living crisis, then companies need to make sure that the motivational effects of a well-structured channel loyalty program will direct any potential business opportunity towards them.
Those who use this time to reimagine, innovate and inspire will be in a position to thrive during this latest global crisis. Here are some of suggested tactics:
· Communicate - use your program to communicate and maintain engagement amongst your target audience. If sales are down, introduce non-sales point earning activity like completing product information courses, participating in online games that are fun, educational and allow participants to interact with other participants (e.g. leader-board, challenges etc).
· Plan – use this time to plan what products, what behaviours, what margins you want the loyalty programme to achieve. A targeted and specific set of rewarded behaviours will always generate the desired ROI as opposed to a misdirected blanket approach.
· Segment - this is the ideal time to use your program data and analytics to segment your program participants into smaller personalised persona groups. Think about what you want each of these groups to achieve? What do you want them to do that will add value to your business? What personalised calls to action can be deployed to ensure you are ready and can hit the ground running when business trading starts to return to normal.
· Launch – if you are thinking of launching a program or a new program element, this is the time to innovate, test and plan for the launch. Encourage participants to gain equity in the program with opportunities to earn quick points. Tactics such as double points and fast starts will help accelerate this.
· Be bold – this is the time to seize the opportunity. For example, join forces with a coalition partner to drive sales of bundled products and ‘double-dipping’ opportunities.
We need to remember that loyalty programs work their best in times of downturn and recession, when demand is soft and program sponsors need to differentiate their offering and value proposition. Whilst as a society we are facing unknown challenges, instability and anxiety, as a loyalty practitioner looking at the business challenges and opportunities in the future, there is enormous cause for optimism.
