#517: The First Key to Success is the Making of Members

This week’s episode of the “Wiser Loyalty” podcast series explores an advisory-led course from the Loyalty Academy™ curriculum, Key Success Factors in Loyalty Marketing (course #112). Our hosts today are ⁠⁠Bill Hanifin⁠ and Aaron Dauphinee from the Loyalty Academy faculty.

Our loyalty leaders first set-up the discussions for the month of April that will focus on identifying some, but not all, of the components to creating customer loyalty successfully. They list the long-standing and known keys to success, but also pepper in a few more recent known enablers, before diving into “program member enrollment” to kick-off.

In the Wiser Loyalty series, Bill and Aaron draw a theme each month based on the courses required to earn the Certified Loyalty Marketing Professional™ (CLMP™) designation and this is now the third month of this global loyalty education series.

Show notes:

1) ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Aaron Dauphinee⁠⁠⁠⁠

2) ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bill Hanifin⁠⁠⁠⁠

3)  ⁠⁠⁠⁠⁠⁠⁠The Wise Marketer 

Audio Transcript

Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m Paula Thomas, the Founder and CEO of Let’s Talk Loyalty and also Loyalty TV. If you work in loyalty marketing, you can watch our video interviews every Thursday on www.loyalty.tv. And of course you can listen to our podcasts every Tuesday, every Wednesday, and every Thursday to learn the latest ideas from loyalty experts around the world.

Today’s episode is part of The Wiser Loyalty Series, which is hosted by our partners, The Wise Marketer Group. The Wise Marketer Group is a media education and advisory services company providing resources for loyalty marketers through The Wise Marketer digital publication and the Loyalty Academy program that offers the certified loyalty marketing professional or CLMP designation.

I hope you enjoy this weekly podcast, The Wiser Loyalty Series, brought to you by Let’s Talk Loyalty and The Wise Marketer Group.

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Bill: Hello everyone. I’m Bill Hanifin, the CEO of The Wise Marketer Group, and one of the two hosts of The Wiser Loyalty Series. I have my partner, CMO, Aaron Dauphinee with me as well. Aaron, how are you?

Aaron: Good, how are you Bill?

Yeah, and thanks to everyone for joining us again. This is the first one of our April episodes, and for those of you tuning in for the first time, or maybe simply as a reminder for those with us each week, this series is all about introducing constructs from the loyalty Academy course curriculum that we find interesting, and we hope will help all of you that are part of the conversation here to become quote, wiser on loyalty. So that’s the idea. A little education, a little fun, a little, exchange of ideas.

So each month we tackle constructs from a new set of course curriculum. And throughout this month in April, we’re going to be talking about key success factors for loyalty programs. And this is based on our course 112. if you’re familiar with the curriculum, we’re not going to be covering all the content, of course, but we’ve selected, four concepts that we think are really most important, most compelling and very much in flux right now in the market. So we thought we’d start with those. So, Aaron. Let’s get started.

Aaron: Yeah. Why don’t I set up some some guardrails around this. I think the first thing to make an assumption, we talk about what are the best practices or the key success factors and we do a list of them.

It’s some things are precluded already because we just assume them to be a baseline and inherit and things like, you know, having fundamental design principles and adhering to best practices in general. Such as, you know, having clear objectives, making sure you have solid financial planning, making sure you have KPIs and a measurement in place the development of a strong value preposition and even certainly making sure that your segmentation strategy is sound.

Those things we’re just assuming are inherent. You have to have those as a starting point. So that’s what I think we won’t. Well, we’ll lean in because all these things are interlinked, but we won’t specifically go into those practices. They come in a different conversation probably in another month when we cover another course material.

And the last is of course the assumption that you know, bad design leads to failure. So you really need to execute flawlessly. Like that’s just an underscored thing that we just, you know to get to success, that those are two, two main assumptions and paths that are inherent. But when we originally looked at this you know, and it’s been a while now we had about 10 top original key success factors that we outlined in our course.

And we’re going through the process of revamping our curriculum. And since then, with some modernization you know, we were sitting about, about a dozen or a little bit more than a dozen now that are probably listed here. So. And that’s not surprising that we’d have more because customer expectations are rising, you know, innovation is driving the quote unquote art of the possible.

That’s a phrase that we learned, and we’re leaning towards adopting that we learned from the CEO at loyalty juggernaut. They first, or he first introduced us to it in a loyalty context. And so we like that, but all of which is to say, you know, those original 10 really came first from our faculty’s perspective and points of view.

We interviewed some individuals around the world, some global consultants. We talked to our clients both current and past at the, at that point in time. And the list really looks like this. You know, there’s an enrollment metrics, there’s communications, there’s bonus tactics. You have to multi tender and a multi-channel program pardon me, multi-channel program in place.

You want to make sure your earn velocity sound that the program’s transparent frictionless as people come in and out of it and engage with you tiered benefits are critical point. And we’ll talk about that throughout the course of this month is specifically you know, your partnerships in terms of the program need to be optimized and providing value.

The experiences that you provide and or surprise and wow factors. There’s another factor. As well as you know, your, the technical robustness of your platform. Those are kind of the original 10. And then if we think about how that’s evolved you know, enrollment is one thing to get people into the shop, into the membership base, but engagement tactics have risen up.

And so those are two equal hand and glove type of components that come into play for key success. Certainly analytics and moving into. You know, real time or dynamic type of experiences often AI enabled now in some regard. And then the last one that I really get like, is this equity that comes into play about the experiences that are both human and technology led like that?

Defining the balance between those very much like omni channel needs to be consistent. Those experiences we’ve seen tech and human need to also, be consistent as well, too. So anyway, that’s kind of a long list. We’re not going to cover those, as you said, in terms of the course of this month, but we’ll cover four of them that we think are kind of interesting.

And so let’s dive into that first one, which is, you know, quickly taking a look at how we or what are the right ingredients, if you will, in considering when you’re, quote, unquote, making members, you know, which is all to say, we’re talking about the importance of, you know, your path to enrolling members into the program.

Bill: So, hey we both know that if you don’t reach critical mass, if you don’t get the right population of enrolled members that the program will never get off the ground. Right? It’s you have to establish that. Yeah, you’ve got to quickly move to activity levels after. And that maybe speaks more to the engagement side of this, but you have to make enrollment, easy and accessible for people so that they can join right? All the hard work that you’ve done. If you don’t have a good enrollment process, you know, you just thrown up a bunch of speed bumps and you’ve sort of denied all the good work that you’ve done. So there are 3 words that, that hit me about this and I’m really passionate about it because I’ve worked with a lot of smaller retailers that struggle to get people’s attention.

But if you just think about ease, simplicity and flexibility, and I know there’s almost there almost isn’t a marketing word we can grab onto these days. It doesn’t sound trite or overused or something. So ease, simplicity, flexibility. You say, okay, Bill, I think I’ve heard that before. But what does it really mean?

Like, for me, ease means. I have some choice, I know what to do, like everything is clearly communicated to me and I know exactly what I need to do. So, for instance, if I looked down at a payment terminal, when I put my card in at a restaurant, a QSR, maybe, and it says, are you a member of the loyalty program?

Yes. No. No. Please enter your phone number and there you go. All I have to do is enter a phone number. Next thing you know, I have a text message. I can opt in for further communications and then I kind of go on the journey from there. That’s ease for me. Like, you know, using a QR code is really useful in a lot of settings, but you have to also realize that you’re expecting people to convert to go to a mobile website and then engage in a process.

So maybe slightly more complicated, but very high utility, right? So it’s that ease and the simplicity. And I think on the flexibility side, Aaron, for me, it’s you have to realize, like, maybe having a mobile app only type of program isn’t always the solution, even though they’re very popular today.

You’ve got to offer. Multiple channels of enrollment, and you’ve got to take into account the demographic, the profiling of your audience. You know, not everybody wants to download a mobile app, some do and then, you know, minimize the number of steps. And here’s 1 more for you, just a thought, and then I’ll let you add on to this.

I know you’ve got a bunch of thoughts here is sort of minimize the burden on your frontline staff. If you think that my enrollment is going to be. Sparked up by, you’re enthusiastic frontline people inviting everybody it may or may not happen, right? It’s just very difficult, especially in high turnover environments.

Like, even people who have good intentions you know, don’t always follow through. They’re not hired to be salespeople. They’re hired to run the front of the counter.

Aaron: That’s the word that go last for the card program comes in for with an employee incentive component behind it, which is a formidable.

Bill: That’s right.

That’s excellent, like, so for me, when I think about this impact on enrollment and why it’s a key to success, it gets down to you know, we’re often asked a lot of times that what are the best programs out there and immediately people jump to, well, the program with the the largest number of members is the one that, you know, is the best program that perpetual thinking of, you know, size is all that matters.

And that’s, not the case. I mean, in some instances, it is because it’s you know, certainly there are, there’s a certain amount of fixed costs you know, whether it’s the launch costs or your setup costs or some fixed costs and ongoing operating costs that you’ve got to cover off that critical mass in some order of magnitude to make sure your program is efficient.

But but really it’s around that engagement because there is a lot of diminishing returns at some point with enrollment, right? And so, you know, get that kind of long curve. I always talk about, and it may not happen right in year two or whatnot, but at some point down the road, you’re going to get that diminishing returns effect.

And so you want to make sure that not just getting bodies in, but making sure they’re active and then also engage. And that’s what we’ve coupled up the enrollment with engagement metrics as a could pairing to for true success in terms of how your program operates. And so, you know, most brands typically want to know as much as possible about their customers in that first step and you talked a little bit about QR codes of getting the ease in and then making it efficient you know, knowing someone is the first part of any relationship, right?

So you want to make sure that you get that known long gone to the days of the ghost carding where you didn’t know someone, but they were active in your program and you had no idea about what they’re doing, but they might have been one of your best customers, like we’ve past that thing, gosh, so, so really you know, that enrollment metric really is, it does have a cascading effect on other program KPIs as well.

That’s an important thing to think about. So, you don’t want to fixate on it alone, but you know, we are not in the business of just acquisition. We’re in the business of loyalty. You know, it’s about intention as well, too. And so, you know, with me, as we view, the enrollment success is that precursor that 1st point, you know, it really is, as I said, that activation and then that move to engagement.

That’s really starting to define where how programs are succeeding and bettering other programs over the long term. You kind of touched on this already, so I won’t dive into too much, but, you know, many programs. They do this by just creating that frictionless, you know, easy methods to enrollment. Sometimes at the expense of, you know, getting a totality of information, as we said, you know, which they just kind of hedged that they’ll get it in the onboarding or later on in engagement and downstream and innovation and technology certainly helped to do that.

But the others, you know, it’s because there are other programs that in some regards, they don’t want a long tail. They don’t want everybody in, they want a smaller size. Right. And so they’re intentional, in terms of an introducing friction, because they desire a specific type of customer, you know, some tools and mechanics around this, you know, a fee or no fee program, right?

That says right there. Only certain group are really going to be interested in a fee program versus a free program. Right. Maybe we could talk about a couple examples. I don’t know. I like some friction alone. I like Cumberland Farms as an example of, you know, providing extra data to get the total incentive on an ongoing basis for the discount.

You have to link to your actual bank details as opposed to a credit card transaction process. And so there’s a heavy upfront investment in that, but the payoff, and I know you’ve talked about them, so maybe you can add to that, but I just, wanted to note that sometimes it’s not always about the size that matters.

There are specific programs and it’s all about aligning to your values and what you want to get out of your program specifically,

Bill: Right, so it’s really interesting. I just want to comment. I would think I was focusing a lot on high frequency retail. And so thinking about reducing friction, I hope everybody caught Aaron’s point about introducing thoughtful friction, because that can be really important in the right kind of setting.

Super important. So, you know, we’re not promoting any particular brands, vendors or anything like that. But I’ll tell you that of the point of sale systems that I’ve seen in the market, at least in the US, there’s 1 called toast, and they have a system that allows you to be recognized by the payment card that you use for a transaction.

So talk about simple in a QSR fast, casual type environment. Insert your card. It asked you those questions I mentioned before you can enroll by just hitting a button, adding your phone number. And then when you return, if you pay with the same payment card, it will recognize you because they keep a hash number on file.

And so it will recognize say, Hey, you’re back. Thank you. And it’ll let you know when you have a reward, all these sort of things. You know, that’s what I call about as easy and simple as it can get. So that works for a lot of people and so that system has worked across a lot of different. It’s more about that system than it is, maybe the, you know, the individual restaurant brand, but, you know, on the flip side, I’ll just mention a couple that have. I’m always trying to help people out and I, I talked to him about this, but there are a couple, of of chains franchises that I’ve seen that have 140, 150 locations. And I’ve talked to him about, you know, please give people an option besides a mobile app.

I know the mobile app is incredibly powerful, but please offer something different because the step is you can’t even discover. What the program is all about and get involved until you’ve downloaded, created an account and got, and how many people there’s going to be a lot of attrition in that process.

So that’s one. The other one is, which I have mixed emotions on. I’d be curious to know what all our listeners think about this, but, the point of sale systems that have the separate piece of hardware on the counter, you know, they can be a really good solution for merchants who can’t afford a more sophisticated program, or can’t just change out their point of sale system because they want a better loyalty system.

I understand that. But at the same time, sometimes it’s just confusing to say. So what should I do with this one? Do I put my phone number in here or do I query it when I come back and see if I have a reward? It’s it always seems to add a couple questions to the process and make it slightly confusing, so.

Yeah, that’s starting to link

Aaron: into some of the other key success factors like the robustness of your technology.

And certainly we’re starting to see a lot more vendors all the way through integrate in, and, and you know, the patchwork component of being able to take legacy systems and patch together to create better experiences for the customer and simpler experiences that make sense you know, innovations catching up very quickly.

So anyways, maybe we’ll leave it there, we have lots more to say on this topic, obviously, but we want to leave some time for questions. For the next few weeks. Maybe we’ll say I do. And if you don’t mind bill, this is going to come out on April 2nd which happens to be my mother’s birthday and I know she’s listening.

So mom, I just want to say happy birthday. I love you lots. I hope you have a great day.

Bill: Happy birthday, mom.

Aaron: Take care of everyone.

Paula: This show is sponsored by Wise Marketer group, publisher of The Wise Marketer, the premier digital customer loyalty marketing resource for industry relevant news, insights and research. Wise Marketer Group also offers loyalty education and training globally through its Loyalty Academy, which has certified nearly 900 marketers and executives in 49 countries as certified loyalty marketing professionals.

For global coverage of customer engagement and loyalty,check out thewisemarketer.com and become a wiser marketer or subscriber. Learn more about global loyalty education for individuals or corporate training programs at loyaltyacademy.org.

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