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5 myths regarding loyalty programmes

Małgorzata Roszak-Sygocka

Each year, more and more companies notice that loyalty programmes not only help obtain new and keep current clients, but also help increase revenues and competitive advantages. However, in regard to how to effectively build loyalty, several myths arose that may interfere with the selection of effective tools and implementation strategies. It is time to break their spell.

Building loyalty with contracting parties and business partners is a long term and demanding process, but these days, it is required regardless of the scale of one’s business activities. How can one avoid making mistakes? What should one look out for? Here are five of the most often repeated myths regarding loyalty programmes.

1. Loyalty programmes require significant financial expenditures and are a only good solution for large companies.

Nothing could be further from the truth – loyalty can effectively be built on a smaller and larger scale. Not all loyalty activities require significant financial investment. For example, it’s possible to use the bonus coupons and cards or the modern Click e Pass e-voucher – an access code to a wealthy online rewards catalogue offered by Sodexo Benefits and Rewards Services. Each of these three solutions is an excellent manner in which to, for example, thank contracting parties for their involvement in sales or encourage new clients to use the company’s services and as such, establish or improve relations with them. In addition, these tools do not require complex logistics, provide companies with the freedom to manage the budget, and the recipients – the freedom to choose their rewards.

2. A guaranteed reward is the best motivator.

The mere guarantee of receiving a reward is not enough to convince someone to participate in a programme. The reward must satisfy the expectations of the participants, and thanks to this, fulfil their dreams. Each of us is different and, as is well known, the best gifts are the ones we choose ourselves. This is why the optimum solution is to provide participants with the ability to independently choose their reward from a rick catalogue. It is also a good idea to make it available electronically. Contrary to its printed counterparts, it is easy to access and can be edited quickly, which is especially important given rapidly changing trends, ex. in the area of electronics or multimedia. In addition, an online catalogue also means that the organised does not need to stock up on and bear the costs of storing rewards, which allows for the optimisation of the budget.

3. Attractive rewards are enough to maintain interest in the programme.

In order to build stable relations with participants, it is not enough to offer them interesting rewards. Although they are the magnet that will draw them to the programme, in order to maintain interest over a longer period of time, it is necessary to properly manage communications. They must be clear, personalised, and tailored to the group towards which they are directed. If a group is diverse, it is worth diversifying communications using websites, e-mail, SMS messages, and allowing for direct contact with the sales representative of the given company. Clearly specified tasks and rules allow for additional questions to be avoided, and participants will be able to quickly begin fulfilling their goals.

4. Loyalty programmes have a universal form.

Loyalty programmes cannot have a universal form as each company has different business goals and needs. When planning a loyalty programme, one must ask: why do we want to organise it? Do we want to quickly increase sales, or would we rather strengthen our market position in the long term? Is our goal to build distribution and increase the availability of our products, or would we rather reach new sales channels? The effectiveness of a loyalty programme largely depends on having a well thought out concept and well organised campaign. The proper implementation of such a project and its effective management requires time, the appropriate coordination of processes within the company, creativity, and ideally, experience as well. This is why it is often worth relying on the knowledge of outside experts that will help select the appropriate tools for the goal that the company wishes to achieve and properly plan the entire undertaking.

5. All loyalty programmes can be conducted using one’s own resources.

Large scale loyalty programmes are a complex logistical undertaking. It is necessary to carefully analyse the employee capabilities in the given company. Do the employees have the appropriate knowledge, experience, and time, as well as the technical resources that are necessary to effectively achieve the specified goals? If the company’s resources are insufficient, professionals that specialise in loyalty building can help. Depending on the needs, it is possible to obtain outside support for a part or all of the undertaking. For example, one of the biggest challenges for companies is reward logistics. What should be chosen? How and where should they be stored and distributed? This is why a convenient solution is to fully entrust an outside company such as Sodexo with the logistics.

Well-chosen and planned loyalty activities can bring a wide range of significant benefits. An appropriate dose of knowledge combined with a careful analysis of the resources, goals, and needs of the given company will help select the appropriate tools and manner of organising an appropriate undertaking.