Managing a loyalty program is a lot like a relay race. You might start off with a specific type of rewards program, but then reach the finish line with another. Nonetheless, as long as you aim to give customers a meaningful experience, your brand will be a winner. Don’t be afraid to restructure or re-design your loyalty program to make it more successful! In this guide, we’ll show you all the best practices (and mistakes to avoid) when it comes to a loyalty program revamp.
Not sure whether it’s time to start a replatforming process? Our ebook shows you the telltale signs of an outdated loyalty program! If these apply to you, then start thinking about re-launching.
Table of Contents
What Does It Mean to Redesign a Loyalty Program?
When it comes to achieving the ultimate loyalty program performance, keeping an eye on potential improvement is key. Whether we look at the changes in consumer behavior, CX demands, tech innovations, or AI capabilities, upgrading your loyalty program is very much a crucial part of long-term success. So how exactly can you improve your loyalty program with a refresh?
Depending on the current program results, a redesign process can take form in many different shapes and sizes:
- Adding new features and rewards (to improve engagement and redemption)
- Reshaping into a more digital-first model (app accessibility)
- Rethinking the current point or tier structure (inclusivity vs exclusivity)
- Switching to a more capable engine (more flexibility, better API integrations)
- Upgrading to a different tech stack (improved connectivity and easier reach)
- Revamping the core concept (tech and mechanism overhaul)
In our view, flexibility and accessibility are the most important characteristics for a loyalty platform. For example, it has to have the capability to change the business logic of the program with just a few clicks and to add and/or remove data sources for points calculation on the fly. Also, it has to be easy to understand and use, so that your marketing department can operate the largest part of program management without technical support. In addition, it is a plus when a platform brings a large variety of out-of-the-box, ready-to-use mechanics to jump-start or revitalize your program.
The Big Question: Deleting or Upgrading?
Of course, upgrading or completely rebuilding a loyalty program is a huge undertaking in terms of both time and money. Due to the extra costs associated with revamping a loyalty program, the key stakeholders are just as likely to vote on shutting down the reward system, especially if the program doesn’t meet the expectations or the company is looking for ways to cut costs.
Instead of looking at loyalty programs as a potential cost center, these systems should be treated – and developed – as cash-producing assets. The “Let’s launch and leave it” philosophy doesn’t work because times change, customers change, and technology changes. In order to achieve optimal ROI, you need to invest money, but (!) you have to do it in the right way, based on data, customer feedback, and expert insights.
Loyalty programs aren’t meant to be overnight solutions, their purpose is to lock customers in for the long run. And they work! Based on the Global Customer Loyalty Report 2024, 9 out of 10 companies that measure ROI for their loyalty program have a positive ROI.
Over the last 5 years, I’ve seen client interest in revamping loyalty programs increase dramatically. One of the most common reasons is to take advantage of overall systems upgrade to related systems such as POS or CRM. 7-Eleven’s program, 7REWARDs, is a great example of using the initiative to launch a loyalty program that helped to transform the experience with mobile check-out. As for searching for a vendor, it is most important to find flexibility out of the box, and strong integration capabilities. Solutions that have a closed architecture, rely heavily on services and/or tie you into a cookie cutter solution will hamper your efforts over the long term.
Constant Adaptation and Improvement Is Key in Challenging Times
Another possible reason why so many brands are restructuring their loyalty programs is to make their customer retention strategy more resistant in the face of economic and social downturns. With both companies and consumers feeling the pressure of making the most out of their coin,
creating a loyalty program with a mutually beneficial proposition can help bridge the gap between their worlds.
In fact, 81.4% of program owners confirmed that their loyalty program was helpful during the economic downturn. Similarly, Forrester has called customer loyalty a lifeline during the inflation crisis.
More than ever, customers are looking for experiences. But with the current inflation crisis, these same consumers are also looking for ways to save money on goods and services. With this in mind, and given the current budget pressures businesses are facing, companies need to look to loyalty providers that will enable them to deliver personalized experiences, financial and emotional rewards and connect it all to the customer journey. These solutions need to be flexible to enable marketing teams to be quick and smart – no one can afford to spend money on initiatives that don’t deliver results.
When Is the Right Time to Revamp Your Loyalty Program? – A Proactive Approach Leads to Long-Term Success
Loyalty program revamps are an ongoing trend in this day and age. According to our Global Customer Loyalty Report 2024, 9 out of 10 current program owners plan to revamp their existing loyalty program within the next three years. However, change is already well on its way. Our report shows that 60.3% of loyalty program owners have made significant changes to their programs in the past two years, with multiple reasons behind these actions.
As I’ve previously mentioned, the only way to create a genuinely successful program in the long run is to continue to work on it. Monitor the program after launch, analyze the results, take away the conclusions, and pinpoint areas of potential improvement. But this is only one side of the coin. The other noteworthy reasons behind a partial or complete redesign are emerging trends and challenges in the market.
Typically, I see two driving forces when a loyalty program needs to be redesigned. First, if it does not support the overall corporate strategy and objectives anymore, or secondly, if the program itself is just not beneficial and attractive enough both from a company or a customer perspective. The necessary change in technology – out of my experience – either happens as the overall company strategy is being focused on a customer-centric and data-driven approach, that requires new technical capabilities and processes OR during an overall IT infrastructure update, so that the loyalty system needs to be enhanced as well.
10 Loyalty Program Objectives That Can Be Achieved With a Re-Design
In order to give you a clearer picture of how and why companies opt for renewal, we will list 10 popular goals a thorough refresh can help you achieve.
1. You Want to Increase the Customer Lifetime Value
In order to improve the CLTV, you need to engage customers at every touch point and even outside of the buying cycle. Shifting to a more flexible platform, with a more engaging program type, and a more elevated integration system for more enticing rewards is a viable solution.
2. Using Your Current Platform to Its Full Potential
According to Gartner’s Marketing Technology Survey, marketers only use 42% of the technology they have purchased. When your current platform is either too complicated or has too many unnecessary features, you need to consider investing in a more user-friendly option.
3. You Need to Unshackle the Marketing Team From It
A constant need for programming knowledge is a bane that haunts many loyalty program software users to this day. Internal teams need a flexible platform where they can modify and customize workflows, and send out rewards and messages in the blink of an eye.
Having a no-code technology can make or break your next campaign. Why? Because it offers a user-friendly, drag-and-drop interface that makes it possible to change certain aspects of the program logic without coding skills.
4. You Wish to Step up Your Personalization Game
Carrying out a hyper-customized reward experience is only possible with a complex data ecosystem. If your loyalty program provider, your CDP, and your marketing automation provider aren’t correctly aligned, you definitely need a vendor with more elevated API capabilities.
5. You Want to Offer a Unified, Omnichannel Loyalty Program
Too many manual processes and lacking a unified customer profile for customers that tracks both offline and online activities are two problems that are more common than you might think. Revamping an old loyalty program into a mobile-first, omnichannel structure is absolutely key.
The decision to re-platform often arises when enterprises become frustrated with inflexible legacy loyalty platforms which are not able to support the data-driven, personalized, and omni-channel marketing strategies of today.
To meet the increasingly demanding expectations of marketers and consumers, loyalty technology needs to have the ability to ingest, unify and have a single view of their customer data across all customer touch points. They need to be able derive meaningful insights through predictive capabilities, such as AI and ML. And finally, they need to have the ability to orchestrate and deliver delightful customer experiences across relevant channels that make the customer feel rewarded and appreciated throughout the engagement journey.
6. You Desire to Boost Engagement Between Purchases
The easiest way to do it is to start rewarding non-transactional activities, like charity, recycling, working out, etc. The issue is in properly tracking these actions, to be able to reward them. This would require switching to more sophisticated technology with extended integrations like sports trackers.
7. You Wish to Upgrade to a Pure-Play, Third-Party Solution
Wanting to switch to a more flexible, more feature-rich tech stack is another common reason behind a loyalty program revamp. A pure-play loyalty platform focuses on one thing only: to have the most sophisticated, most advanced loyalty technology, with plenty of modules and capabilities to choose from.
8. Your Operating Costs Are Just Too High
One way to lower program costs is to go with a no-code loyalty platform because, at the end of the day, fewer staff will be needed to operate your program. It’s imperative to pick a vendor, whose capabilities align with your needs, otherwise you risk wasting money on unused features.
9. You Need a Technology That Integrates With Your Other Platforms
Sometimes it’s your tech stack that has outgrown your current loyalty platform. Having a loyalty program that integrates with a large number of other services opens up the possibilities for more creative, more personalized marketing strategies, like loyalty emails with hyper-personalized product recommendations, or processing partner rewards more easily.
10. The Reward Experience Needs Some Spice
Delighting and captivating customers by adding gamified elements, like prize wheels, or creating a challenge-based reward system is a great way to drive engagement. However, if your current tech stack is unable to execute the new vision, then a loyalty program revamp is in place.
How to Begin to Redesign Your Loyalty Program
It cannot be stressed enough that updating and relaunching your loyalty program should be a data-driven decision.
For optimal results, you need to:
- Take stock of where your program currently stands
- Hear internal team feedback (of all departments involved expressing issues they’ve been experiencing)
- Pinpoint specific issues or underperforming areas
Having thoroughly investigated the program from all sides, you’re now able to focus on creating a realistic, workable strategy and a set of clear goals and KPIs to benchmark your new program’s progress.
The Technical Aspect of a Loyalty Program’s Revamping
Executing your vision will be a huge project. According to our findings on loyalty program ROI, improving customer loyalty is an enterprise-wide responsibility, meaning that the decisions and contributions should come from the whole organization, not just the marketing team. This is especially true during the revamp of your loyalty program, which has to be a shared project between the CMO, CTO, and even the CFO.
The Major Steps You Should Follow to Ensure That Your Revamp Process Goes Smoothly.
1. Build the Concept for Your New Loyalty Program
Creating a concept document for your loyalty program is a crucial step, even if you are only doing a simple replatforming. The best thing you can do is to start with the concept documentation and any other relevant information from your original loyalty program. This will speed up the implementation process by a large margin.
Even if you plan to change the loyalty program’s entire structure, you should still use the original documentation as a starting point, and flesh out the differences in program types, rewards, features and so on. And remember: the concept document should always be longer than a page!
Struggling to start brainstorming for the loyalty concept? Our worksheet will help guide you through the most important steps.
2. Select the Right Loyalty Platform Provider Through an RFP
If there’s any single takeaway in this article, it’s that a lot hinges on the capabilities of your loyalty technology. That’s why the process of picking a best-in-class platform provider should be taken seriously. For this, we highly recommend sending out an RFP.
Creating an RFP takes a lot of time, but in this case, it’s a beneficial process, as you will need to list all your needs both strategy- and technology-wise. That will make it much easier to review your applicants and make a solid business decision.
3. Execute the Data Migration
Once you have signed up with a technology vendor, it’s time to get into the fray of things. It’s worth highlighting that launching a loyalty program the second time around is much smoother because brands already have experience with each implementation stage and know which pitfalls to avoid.
Still, there’s one extra step that comes in during a loyalty program revamp: data migration. It involves migrating your current loyalty data to your new provider. This process requires thorough data mapping and may take a while depending on the number of data categories you wish to move. The best practice is migrating customers, rewards, point histories, and transaction histories. Never leave this step to the last minute! Dedicate at least 1-2 months to ensure that all data is migrated properly.
4. Integrate, Configure, and Test the New Loyalty System
The next step is integration, ensuring that data flows seamlessly between the loyalty program, your own systems, and any other third-party service providers. Once the integration is complete, it’s time to start building the end product: set up various features on the platform, upload images, configure the values for currency conversion, and so on.
Lastly, don’t forget about User Acceptance Testing, during which both positive and negative scenarios are tested (as well as rare edge cases) to prevent bad experiences once you launch. This should take at least a month, but depending on your previous experiences, it never hurts to dedicate extra time to it.
5. Prepare for Launch
As the launch of your updated loyalty program draws near, make sure to notify members about any downtime while things are being set up behind the scenes. This is important because some customer events might happen during the transition period, so make sure to launch with up-to-date data.
It is also very important to set up your marketing communication and set customer expectations. Program members tend to see the glass half empty when it comes to bidding goodbye to a rewards program they’ve gotten used to, so make sure to put their minds at ease by highlighting the exciting new features and benefits as much as possible.
Parting Words Before the Big Transformation
When you re-design your loyalty program, the best thing you can do is to follow best practices and use the experience you have already accumulated. If, however, you don’t have the staff and documentation available from the launch of your original loyalty program, don’t worry. You can ask a consultant to review your program concept. There is no harm in conducting loyalty program trend research either. Your careful preparation will make the implementation process far quicker and smoother, without a doubt!
Hopefully, we have shed some light on the complicated but crucial process of rebuilding your loyalty program. If you are ready to revamp your loyalty program, our experts at Antavo will be happy to hear about your concept and discuss how our technology can fit your needs. Just send us your RFP, or book a demo.
Also, don’t forget to download our Replatforming Playbook to know when the time has started ticking for your loyalty program.
Attila is the CEO and Co-founder of Antavo. He has a solid IT background and has been a tech entrepreneur for over 15 years, and is also an expert in electrical technology. He combines a down-to-earth vision with inspiring enthusiasm, helping steer creativity and innovation at Antavo.
