Boom or Bust, Loyalty is a Must

Covid-19 is continuing to cause chaotic and challenging business conditions where many industry sectors are forced to close, suspend or modify their trading options. But now is the time to invest in your loyalty strategy. Rather than reducing focus and suspending elements of your loyalty program, this is the time for vigorous planning and innovative program design so that companies are in the prime position to cash in on the tsunami of pent-up demand that will follow when the virus has passed.

When the demand returns, and return it will, businesses need to ensure that they have a strong and engaged B2B distribution channel, that is clear in its focus of what products to sell and what brands to prioritise. Those companies that take the time now to invest and structure their programs will be in the strongest position to increase their market share.

If the economy is to escape a continued recession as a result of Covid-19, demand will start as a trickle as the first pioneers emerge from their forced hibernation and start to purchase goods and services that they have been without for the quarantine period. This trickle will turn into a tsunami as the critical mass starts to follow. A strong, focused channel, being rewarded and encouraged by their channel loyalty program will ensure that all opportunities are directed towards clients sponsoring a program. Conversely, if there is a downturn in the economy as a result of the Covid-19 pandemic, then companies need to make sure that the motivational effects of a well-structured channel loyalty program will direct any potential business opportunity towards them.

So how can loyalty program managers use this time wisely during the isolation period? Here are some tactics:

COMMUNICATE

 ·      Communicate - use your program to communicate and maintain engagement amongst your target audience. If sales are down, introduce non-sales point earning activity like completing product information courses, participating in online games that are fun, educational and allow participants to interact with other participants (e.g. leader-board, challenges etc).

PLAN

·      Plan – we know that Covid-19 and its effects will eventually disappear and will no longer be a threat to our society and business in general. Therefore, we need to use this time to plan what products, what behaviours, what margins we want the loyalty program to achieve. A targeted and specific set of rewarded behaviours will always generate the desired ROI as opposed to a misdirected blanket approach.

SEGMENT

 ·      Segment - this is the ideal time to use your program data and analytics to segment your program participants into smaller personalised persona groups. Think about what you want each of these groups to achieve? What do you want them to do that will add value to our clients’ business? What personalised calls to action can we deploy to ensure we are ready and can hit the ground running when business trading starts to return to normal. 

LAUNCH

 ·      Launch – if you are thinking of launching a program or a new program element, this is the time to innovate, test and plan for the launch. With the increase in demand when the threat of Covid-19 subsides, participants who enrol in a program will have an increased chance of selling, or indeed buying, products that earn them quick points allowing them to get equity in the program. Tactics such as double points and fast starts will help accelerate this.

BE BOLD

 ·      Be bold – this is the time to seize the opportunity. We can see this being implemented by the airlines (who have strong mature programs). Whilst their fleets are grounded, we have seen a marked increase in Frequent Flyer activity aimed at rewarding for non-flying activity, initiating brand engagement and focus. They are focusing on coalition partners with whom you can still earn points, whilst their core product is offline.

We need to remember that loyalty programs work their best in times of downturn and recession, when demand is soft and program sponsors need to differentiate their offering and value proposition.

Whilst as a society we are facing unknown challenges, instability and anxiety associated with Covid-19, as a loyalty practitioner looking at the business challenges and opportunities in the future, there is enormous cause for optimism. Boom or bust, loyalty is a must.