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Loyalty Is Not A Matter Of Choice But Definite Compulsion For The Marketer

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.

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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 of course 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 per-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 efficiencies 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!


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