Loyalty Truth

What’s Your Plan?

Contributed by Mike Capizzi

Economic tidal waves cause disruptive things to happen along the loyalty marketing shoreline.  Whether tsunami or riptide in magnitude, the resulting on-shore event carries the potential to drown the beachcomber or create a sea-side hero.

Which will you become?

The current economic environment has many loyalty marketers scratching their sun-burned foreheads.  Large enterprises with well established loyalty marketing program strategies may not weather the tidal wave.  If their firms become subject to an inevitable round of cost cutting, dilution of the loyalty program value proposition and abandonment of best customers, then bodies will be washed ashore by the pounding surf.  Call the ambulances and the shore patrol.  Please bring a few extra body bags.

Loyalty marketing service providers who feed off of the large enterprise client will be companion victims.  How do you resuscitate the relationship and corresponding revenue potential when your client is on life support? Don’t scratch your head or reach for the sunscreen; you should be well entrenched in your “Baywatch” plan.  Otherwise you’ll fall victim to the never ending cycle of the rise and fall characterized by the coastal tides.

Simply stated, what’s your plan?

If you are on the client side, get ready for the merger and acquisition tidal wave.  You have a loyalty program, you have a team in place to manage it, you rely on your loyalty marketing service provider to deliver.  You understand best customers, you reward and recognize them appropriately, you have the metrics to prove it.  Who cares?  Here comes the judge and he ain’t pretty!  He carries an axe in one hand and a spreadsheet in the other. When you are merged, taken over, re-structured or otherwise displaced, will anybody care about your past accomplishments?

Of course they will if you have a plan.  Best customers always deliver disproportionate value to the enterprise.  Can you prove it?  Can you articulate the merits and shortfalls of your own loyalty program initiatives versus the concepts and ideas of the acquiring entity? How would the programs best be merged?  How will customers benefit?  Which segments overlap and where is the real potential for incremental revenue post merger? Which service provider or technology platform is best equipped to handle the combined loyalty program databases?  What does the transition roadmap and timeline look like? If you don’t have answers, or at least well thought out opinions, then proceed directly to the unemployment line.  Do not pass go.  Do not collect anything except severance.

If you are a service provider, the picture is even gloomier.  Who is the incumbent loyalty partner and what strengths, weaknesses, competencies, do they exhibit vis-a-vis your own organization?  What do they charge?  What is their cost per point?  How do they add value?  What can you do to position yourselves as the effective and efficient alternative to the incumbent?  If all of this is overwhelming, I understand.  If you are not ready to deal with the impending surge, or prefer to bury your head in the sand, then get ready for the unemployment line.  Bring muffins and a no-whip latte for your ex-client.  You can meet and sympathize with each other every Tuesday morning.

My point in all of this is that you must have a concrete plan.  In writing. With supporting business case tools and logic.  Loyalty program change management is not a new thing; although the art may be lost the artists still remember.  When the tsunami strikes, you will either float to a higher ground or sink in the swell of the salt water.  Victim or hero.

What’s your plan?

Mike Capizzi is Managing Director of Marketing Strategists LLC, an independent consulting practice which focuses on best customer marketing.  Often called the “Loyalty Evangelist” by his industry peers, he has written, spoken, advised and educated on the topic of loyalty marketing programs around the world for more than a decade.