It is common for a manager with a mandate to launch a loyalty program for customers, employees or channel, to reel in shock and horror when he sees the software estimate.
This reaction is something that we have come to recognize and understand well, and goes something like:
- No way! I don’t need this, cancel the project
- Promotions don’t need software to run, do they? So why should this?
- I thought I could handle this on an Excel spreadsheet
- Does this mean my IT department is going to have to get involved?!
- Can’t I just extend my ERP implementation to cover this?
Why do you need software to run your loyalty program?
Because we’re out of the dark ages. That’s why.
A loyalty program is a complex initiative - both strategically and operationally. No matter how simple you think you want it to be, a loyalty program has many rules, with critical data processes, and a need for good program MIS and reports.
Rules, Data, Reports. The three mantras that make software a necessity.
RULES: The first rule is, there are many rules
This isn’t Fight Club. When you’re running a loyalty program there’s the need to have a process and system that ensures that Mrs. Priya gets those 10% accelerated earnings when she upgrades to a Gold membership, while giving Mr. Kumar his bonus 5000 birthday points on 21
st September.
A typical program can end up with multiple rules for earn, burn, membership and tier thresholds, points expiry, bonuses, redemption thresholds, campaigns… all leading to processes that need to be software driven to ensure timely implementation. Additionally, the software allows for changes in rules across all members, products, locations and transactions.
DATA: Your loyalty database is your biggest asset
Your loyalty program database is different from your customer database. It will have fields such as membership number, card number, points, tier, enrolment, expiry, redemptions, upgrades, downgrades, bonuses, etc. that your customer database never will. And there’s still the basic transaction and profile data that needs to be processed which adds volume to the entire setup.
The data needs to be secure. It needs to integrate with POS systems or other enterprise systems. It needs to integrate with the front desk that’s handling queries and complaints. It needs to provide a feed to the program website where your members login to check their points.
Your loyalty software has to enable all of this.
REPORTS: The system is as good as what it reports
MIS and analytics reports are the killer argument in favor of software. Program MIS needs to keep you updated on enrolments, churn, points liabilities, redemptions. All of this and more sliced and diced by store, by segment, by product.
Operational MIS will also be need to tell you how many statements went out this month – on mail and on email, how many calls were handled by your help desk, how many welcome kits were dispatched, how many emails bounced, how many mail returns were handled.
And finally, the software needs to give your analysts the ability to run complex queries on the data to see trends, make projections, do hypothesis testing on campaign results.
End Note
These three reasons of Rules, Data and Reports are the primary ones that make software mandatory when you want to implement your loyalty strategy. If you want a successful program, start your search process on what the software options available to you are by reading the subsequent articles on functionality and evaluation.
To learn more about loyalty software and how to design, evaluate and implement it, contact us at info@bom.direm.com
Also Read
Three reasons for loyalty software
What functionality do you need?
A quick guide to loyalty software evaluation
Pre-Implementation Blues
