Much has been said about the need of Loyalty
and its possible positive impacts which a brand can harness. Much has not been
implemented. When I meet up Brand owners and custodians, for exploring to
implement a loyalty solution, not many of them state this matter on a priority.
Multiple reasons, they share and several more they appear to hide. Some of them
from both lists are enumerated below. This is another humble attempt to
sensitize the marketers on why initiating a loyalty program for their various
stakeholders is only in best interest of their Brand. Some reasons for still
not doing anything on their part will continue to remain-I guess.
First and foremost reason being the desire
to accept change. It is a human tendency to resist the change and do anything
disruptive, away from the conventional notions of marketing. It is perfectly
understand that they want to safeguard their own turf. Quite natural, it is! But
then the desire to resist should not be bigger than the perceived benefit it can
potentially bring about. Ask brand managers who have got into the stream with
full enthusiasm; they would only give it a green flag.
The second reason is the lack of information
pertaining to the demonstrable benefits secured by other brands, who have
witnessed a successful implementation of loyalty. While all marketers like to talk, not many
marketers like to genuinely share with their contemporaries and the younger
breed. They tend to safeguard the information as a proprietary asset developed
for their own brand and intend to keep it that way. We somehow have to break
the notion and get the loyalty practitioners to come on the podiums, find time
to sit in huddles and get them to share the information, processes and benefits
of their own experience of an implementation. It is like getting a medico
surgeon to talk about a new operative procedure that saved a life. Like the
surgeon, their willingness to share can potentially bring a new lease of life
to many brands and give a breath of fresh air to the entire marketing
brandscape.
Thirdly, is
the lack of patience on part of marketers to see beyond the timelines of a
respective financial year. They are glued to their dashboards notifying ROI on
their conventional spends that they fail to see beyond the annual plans and
calendar. The real positive virtues of a loyalty program start delivering only
after intellectual and time investments that transcend over months and years. A
real marketer would understand that neither Rome was built in a day, nor brands
shine on the consumer horizon in a matter of months. Likewise, it is unfair to
put a short timeline to achieve notable success out of a loyalty initiative. It
requires sustained effort to bring about a successful implementation and get
your loyalty communication to work and bring results to one’s satisfaction.
The fourth
reason that withholds any brand to come forward and implement loyalty is a real
crucial one. The uninformed marketer does not know what to expect as a result
of a loyalty program and hence fails to take that step and think in the
positive direction. For most marketers, re-purchase is the sole barometer of
the success of a loyalty initiative. While, I agree to this aspect to an extent
because an over-the-time re-purchase can enable the company to have predictable
and stable cash-flows leading to better bottom-line predictability. But then
there are far bigger and better virtues that a loyalty program can bring to the
table. Virtues like identifying most valued customers, high-referral creation, increased
consumption, adoption of multiple products from same brand, preference over
competition, adherence to brand values and better brand-customer affinity are
just some of the aspects that a successful program can deliver ofcourse over a span
of time. And trust me, most of the above mentioned virtues are measurable, so there
should not be any hang-ups to proceed and jump onto the bandwagon.
The fifth reason
is that when the brands are perfectly in sync with the desire and the value it
can bring to the brand but fail to figure out the required budget to fund a
loyalty program. It is at this juncture that quite a few of the successful
desires get killed. The perceived additional financial burden desists the
marketers who are already reeling under the pressures of a competitive
landscape to proceed. It is at this juncture that the Senior Management of the
Brand and allied functions like Logistics, Brand management, Customer Service
play a critical role in believing the long term virtues of the planned program
and support the marketers. The idea of success it brings to the entire Brand
has to be percolated down to the last men in the Brand army and the thought
well-debated within the power circles before that quantum leap is made. Once
this is achieved, budgets will automatically flow from each department thereby
funding the entire initiative. It has to be well understood that a successful
loyalty initiative is not just a marketing domain or success, but will benefit
the entire Brand existence for years and decades to come. Budgets were and will
always be tighter for anything new that a Brand wishes to experiment on. Look
how the Brands have adopted digital social media in the time of recent economic
recession. It came in expensive by all means and look how it has delivered on
all brand promises. A complete conviction on the part of all stake-holders will
make things happen. And if budgets become an overpowering issue, start small in
a particular geography or for small set of customers- experiment, see value, measure
performance, re-iterate and then go full throttle with the plan. Lack of swords
and bullets has never deterred a soldier to enter the battle scene, they still
go and fight and give it their best fist fight.
The sixth
reason is battling the myth that loyalty program is only about a fixed
percentage of rewards on a pre-set template of sales achievement. That being a
notion, most marketers generally finds it hard to sell this concept internally
to company management as it involves additional pooling of resources or
shooting down an alternate marketing spend, which generally is not taken with a
kind thought. It is time to shatter this myth that loyalty only entails
rewards. Because loyalty can generate a lot of positive disposition towards the
brand and it can change the way your Brand is looked at over competition and
talked about or even dealt with during a sales process. Aren’t these attributes of Brand loyalty?
The seventh
reason, which potentially deters the marketers is the hunt for an agency
partner who understands the genesis and evolution of loyalty, has requisite
experience in designing and managing a loyalty program, has requisite
infrastructure and operational efficiency to match with the vision of the proposed program, has an anchor team to lead and finally who is willing to give
you a long term strategic and operational direction to run a loyalty program.
Speak around to other marketers, rely on Google, browse through the websites of
Loyalty Agencies, the one with most information on themselves are generally the
good ones. Look at their capabilities on their social media presence. The ones
who have good digital and public presence and a happy set of employees are
often the better ones. And, no points for getting that right!
At number
eight, the reason which quite a few marketers endorsed and shared was the lack
of standard techniques of measurability of the initiative. While TRPs and channel/media
popularity indices have historically been a testimony to the advertising spends
for long time, there is no standard measurable index available for justifying
spends on a loyalty program. My argument to this is the need to look within.
There are several (not just a few ) measures which a brand needs to build by
looking inward to the sales processes and performance of their own sales
channels and sales teams. A loyalty program is a great facilitator in sales
processes. It brings in an added benefit of nurturing relationships. Which
customer doesn’t regard acknowledgment? And which customer doesn’t try to
extract an extra pound of benefit? None, I suppose. The brands have to look and
agree upon and do that honestly. Several of our programs have been sustained
for years together, not without a reason. An honest program with honest intention
builds focused communities of customer who deliver performance.
The ninth
reason is the limitation of marketers’ hindsight to not look beyond direct
customers. A brand is not about selling, it’s about creating those influencing
moments when it is perceived in a positive light. The brands which have understood
this, have been winners all the way. Role of influencing channels have long been
ignored and shortsighted. It is only now that quite a few companies have
realized this and wanting to act upon. A single customer can influence another 10
potential customers but an influencer can dictate a million positive dispositions
in his lifetime. At Evolve, we have researched this, witnessed this and practiced
a philosophy of influencing the influencers. And it has worked well.
While there
may be innumerable reasons beyond those listed above which make a marketer
averse to taking a first step on the loyalty bandwagon, there exists a range of
marketers and strategic experts which I and my team have worked with. They are
the torch bearers from varied industries
of IT, FMCG, Industrial Goods, Consumer Durables, and Automobiles. They are the
people who swam against the tide, surfed on rough waters, held their head high
when the tide was high, battled the big management sharks of their respective organizations.
They all had two things in common.
Firstly,
it was their desire to do things differently and take the plunge while many
were enjoying the sea by the shore.
And second
is that they believed in an outsider to come to their board rooms and coach
them on the strategic delivery and tactical implementation which directly
impacted their balance sheets. Not many do that. But then not many succeed!
Harish Motwani
The Author is the Founder Director &
Chief Operating Officer at Evolve Brands, a 12-year young, vibrant and mature -
Loyalty & Experience management company. He can be reached at
harishm@evolvebrands.com
