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    Competing in the Technological Age of Loyalty

    A program should be a long-term decision.

    By Doug Rodewald , W. Capra Consulting Group

    Can consumers be loyal to your company or brand anymore? What incentives persuade a millennial to be loyal to your company? Do loyalty programs actually increase sales, or is the end result that you pay more for your most loyal consumers? Once you start a loyalty program, can you shut it down, or would that upset your best customers?

    These questions, among others, have been studied and debated since the advent of the punchcard. Today’s technological revolution has added fuel — in the form of additional questions and costs — to the loyalty fire, making it more important than ever to be thoughtful, well-prepared and focused when implementing and operating a loyalty program.

    We at Rubix Services have compiled a framework on how to jump into the loyalty world:

    STEP 1: Define Your Goals

    Though obvious, this point remains important. Prior to selecting a program, make sure you understand what drives your desire to engage in loyalty.

    Is it competitors? The desire to be first to market? A strategy to elevate a good brand to greatness? To target a specific consumer demographic that you believe is underserved? Documenting your goals early is critical to long-term success.

    A word of caution: attempting to solve problems prior to defining your goals may force your organization to “lead the jury.” You may eventually end up operating a solution for the sake of a solution vs. designing for business objectives.

    STEP 2: Understand Your Capabilities & Options

    As a technology and payment company, we at Rubix tend to focus on loyalty solutions that fall within this remit. We geek out on possibilities and data. That said, there are many other ways to engage loyalty, including CSR training, localized community involvement, product or experience improvements, and making sure your sites are the cleanest around.

    If your documented goals include building a new loyalty platform that provides your consumers with access to a digital communication channel, allowing you to capture valuable experience data and create new programs and offers, then your ultimate solution will require technology, integration and suppliers. 

    Partner selection will be one of your biggest choices. Consider the following supplier strategies:

    • General Contractor (GC) Model: Work with a third party that can bring the right suppliers together (mobile platform, payment products, loyalty platforms, etc.). Within the GC model, consultancies or solution companies can help you bring many partners to bear. The GC model is optimal for companies that want a more customized solution, but don’t have the internal technological competence to deliver and operate the solution. 
    • Single Source: Many great solutions in the petroleum and convenience market are delivered via a single supplier (think KickBack, Zipline, NCR and others). The single source option is optimal for retailers looking for a turnkey experience.
    • Best in Class: Choosing the best suppliers for each element of your solution requires selecting and integrating a supplier stack to deliver the loyalty program/platform. The most complicated model, Best in Class, may take longer and require more experience to understand which providers are delivering which functional components, and how the system will be operated and managed ongoing. With this approach, be absolutely sure your internal project resources have the knowledge and bandwidth for success short term and long term.   
    STEP 3: Preparing for Launch

    While preparing for launch, make sure to review how your new loyalty program can integrate with your existing programs. Spend time on training. You’ll achieve success through customer acquisition and delivery. Do not skip testing. Invest in fun and engaging launch activities that ensure everyone who interacts with customers is fully engaged in the program.

    As it pertains to your marketing calendar, we suggest repurposing marketing assets several months in advance. If it is thoughtful, engaging and well-executed, marketing doesn’t have to be expensive. 

    STEP 4 to 1,514: Launching & Operating

    Once you are ready to launch, you must own it and live it. As noted in Step 3, make your loyalty program a critical component of your existing marketing plan and consumer experience.

    The brands that have the most successful programs understand the integration of the loyalty program, technology and overall consumer experience. Even for single-site operators, a focus on the program will drive material benefits. 

    Document critical KPIs and track them religiously. When possible, talk directly with users and non-users to get real feedback. Maintain a list of future changes — we promise that whatever you launch with, you will adapt and change over the following 24 to 36 months.

    Final Thoughts

    Loyalty is not a must for every company. The differences between experiences, product, pricing and other variables are too numerous to believe a loyalty program will define your ultimate success. That said, a loyalty program can be a great tool to drive differentiation and deeper relationships. Leverage technology where you are comfortable.

    Your program is a long-term decision, not a short-term fix.

    Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News

    By Doug Rodewald , W. Capra Consulting Group
    • About Doug Rodewald Doug Rodewald has spent the last 10 years establishing W. Capra as a leader in retail technology and payments consulting, and one of the leading EMV consultancies in the United States. Recently, he has taken on the additional challenge of providing best-in-class retail technology and payments solutions to the mid-market via Rubix Services.

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