Margaritaville

Claudia Infante

Quick! Do a mental count: How many loyalty  programs do you belong to? Credit card,  Airline, hotel, department stores, gas stations,  video games??  In the race to “own the customer” and  of course, the data and perceived value that  comes along with it, every business vertical has  created programs and platforms that gratify the  consumer and ensure they continue patronizing our businesses.  On the surface, all those points that appear on a customer’s  balance are the result of some magic formula that accounts for  purchases and spend and transforms them into value figures,  exchangeable for goods and services. The reality is that this  daunting task requires a series of systems, processes, and  Human Resources that must connect and interface to ensure  the program’s success. Here are 7 basic pieces to solving the  programmatic loyalty puzzle: 

2. Data ( clean data) - it isn’t enough to have a lot of  data in your systems. Do a quick check: is the data clean?  Accurate? Actionable? When was the last time you ran a  validation test to verify? More importantly, are you using a  Customer Relationship Management System (CRM) to gather  all aspects of your customers profile (like name, email address,  preferences, etc.)? If you were to create a loyalty program  today, would you be able to identify your top 10 percent  customers by revenue, volume, frequency or lifetime value?  How many sources or systems are collecting this data, and do  you know where all that is going?

 Pro Tip: Invest on a data validation and appendage  process before spending money on loyalty systems. Once  you understand the volume and value of your data set,  your loyalty program will be much easier to design and  calculate for cost of operation and ROI

Connectivity - at the core of all seemingly simple loyalty  programs, connectivity is the one element that can derail any  automation dream. When designing a loyalty program based  on guest interactions (purchases, visits, engagement, etc.),  it is crucial that all the systems powering the program’s elements then connect in the backend to drive the  guest experience forward and provide  insights on the program’s success and  opportunities. Pro Tip: when looking  for new tech solutions, make sure  integration is included as part of  said tech solution’score product  development roadmap. 

3. Governance should  be the cornerstone of all  your data processes - from  collection to access, to business  rules and distribution of said  information, all aspects have to  be part of a well-designed and thought  through process to ensure the integrity,  security and usability of the data. Pro Tip: not  all data is created equal. Consider enlisting the  help of a data governance and privacy expert as a  member of your loyalty team. 

4. UX and UI - less is more, unless we’re talking about  loyalty. The age of instant gratification and the influx of  millennials to the consumer pipeline requires every application  and service to be fast, secure and easy to use. Mobile first is  not a fad, is a way of business and your customer care solutions  must be on par with the times to be impactful. Pro Tip: invest in  well-designed, mobile first applications and solutions that put  the guest experience first: chatbots, voice enabled solutions  and digital wallets are just the beginning. As tech and service  continue to evolve, so must your applications. 

5. Business Intelligence is the unsung hero of most  applications - From reporting to trends, the BI solution  attached to your loyalty program will not only demonstrate the  effectiveness of your strategies around performance (increasing  visitation, frequency of transactions, life time value, etc.) but  can also identify areas of opportunity in marketing, integration of products, services and high profit  margin offers that can give your program  the ROI edge. Pro Tip: make reporting a  core component of your program and the  center of your strategy meetings. 

“Invest on a data validation and appendage process before spending money on loyalty systems”

6. Security - with all the  high-profile data breach cases  surfacing in the last year and  the myriad of information that  has flooded the marketplace,  consumers are ever more  cautious when providing  data to programs and verifying  their activity, transactions and  point balances. It is imperative  to have clarity for your members in two  areas: data protection and ways that their  data is used. At the core of security, trust is  paramount: consumers are experiencing data  and loyalty program fatigue and the best policy  is transparency and thoroughness. Furthermore, inititives  like the General Data Protection Regulation (GDPR), an  EU legislation and the soon to come in effect California  Consumer Privacy Act will effectively change the way we do  business and transact in data currency. Pro Tip: follow the  trail of your data and identify the points of failure and design  flaws that will inevitably exists in the plan and address them  as you prepare to launch your loyalty program. You will thank  your future self for taking the extra step.

 7. Machine learning and AI - Loyalty programs have been  around for over 3 decades and haven’t really changed much.  While they generate high volumes of transactions for hotels  and airlines, for the consumer, it is very much a numbers/points  game. AI and Machine Learning have brought personalization  to the loyalty landscape and is the way loyalty will be relevant  to the next generation of consumers. Assuming you have  checked the boxes on 1 through 6 above, this last step will  close the loop on data and consumer engagement. Pro tip: don’t  settle for traditional loyalty models. Create a program that  challenges the status quo and evolves with the technology and  customer behavior. 

The last piece of the puzzle, and the most important one  is multi-discipline collaboration. Technology is a cornerstone  of any program, but it also depends on operations, marketing,  finance, training and legal to be successful. Engage your  counterparts in these areas early and discuss the effects of  each step to their day to day functions, you may be surprised  how much these conversations alleviate friction and save time  in the long run.