Comments on: Loyalty Program Design Fundamentals Part II

By: Yuping Liu-Thompkins

Yuping Liu-Thompkins — Wed, 12 Oct 2011 02:59:00 +0000

Jason, I assume you are talking about retention of loyalty program members within the program? Unfortunately there is not much research on this topic, but it is certainly something very important. A few things that come to mind:
- Active communication/interaction with consumers instead of putting the program on auto-pilot
- Updating the rewards at regular intervals so that they seem fresh to consumers
- Making sure the program is easy to understand and participate in
- Set a relatively short expiration policy such that the consumers will more actively manage their program accounts
- Of course try to remind consumers to use the program at each touchpoint (e.g., whenever they make a purchase)

Hope this helps.

By: Yuping Liu-Thompkins

Yuping Liu-Thompkins — Wed, 12 Oct 2011 02:16:00 +0000

Bhushan, I’m sorry I can’t help you much there. I’m not aware of a particularly economical solution for that. The companies that I know still handle that internally. Maybe you can try Amazon Mechanical Turk (http://www.mturk.com)? It’s worth looking into, but privacy/security could be an issue.

By: Bhushan N

Bhushan N — Tue, 11 Oct 2011 05:51:00 +0000

Thanks for ur reply.

Point-2, is exactly we are designing our program.
We also thinking of 2 levels iof tiering out of which 1 level will be communicated to customers while other will automated at backend to identify valuable customers with no-pts.

Actually our major problem is, huge price gap between products which are coming under unified loyalty roof .

Lets see how it shapes up.
We are also introducing Mobile Apps to capture “Probable” customer, which are potentially sound but not yet eligible .

Just one question , can you advice on any technology (economical) which gets rid of data entry of profile forms at backend ?????

Bhushan N

By: Jmcqueenhorizon3

Jmcqueenhorizon3 — Tue, 11 Oct 2011 03:04:00 +0000

Hi Yuping,

Can you direct me to resources for retention strategies to reduce defection?

Thanks,

Jason

By: Yuping Liu-Thompkins

Yuping Liu-Thompkins — Tue, 13 Sep 2011 15:14:00 +0000

Bhushan, thank you. With the type of program you are designing, a key challenge will be potential confusion to consumers, which could discourage participation. To avoid confusion, you may want to consider one or both of the following:
(1) Define points vs. non-points structure based on entire categories of products (e.g., shoes instead of certain specific brands of shoes). Product categories are easier for consumers to comprehend.
(2) Either issue no points with a majority of brands/categories or issue points to a majority of brands/categories, but avoid having a large set of brands in both. That will be very hard for consumers to remember. The literature suggests that even with a few brands/product categories eligible for point accumulation, it could still increase traffic and boost sales of other products within the store. So you may not need to include that many brands or categories in the program.

The wide varying UCP presents an opportunity to design rewards for minimal cost. I imagine the retail price does not always coincide with UCPs. So it’s possible to choose products with minimal UCPs but equivalent retail values as rewards.

Hope that helps. Feel free to contact me if you have further questions.

By: Bnirgude

Bnirgude — Tue, 13 Sep 2011 09:57:00 +0000

Really helpful post.
We are designing a retail loyalty program where there is mix of tier & non-tiers (or points & non-points) brands . Also, UCP(unit cost price) is also differing alot.

Any idea / advice you can give to achieve the same.

Thanks,
Bhushan N

By: Yuping Liu-Thompkins

Yuping Liu-Thompkins — Thu, 01 Apr 2010 12:18:13 +0000

Hello Kile, by complete onsite client provision, do you mean hardware and software? The cost probably varies by industry. Do you have any specific industry in mind that you want to target?

By: Kile

Kile — Thu, 01 Apr 2010 11:27:43 +0000

Thanks for your great post! As a wanna-be loyalty service provider, what is the best model to provide this service? As software-as-a-service or complete onsite client provision? For each option, what are the program cost to provide this service?