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Re-Calculate: 3 Words For Loyalty Marketing in 2015

Re-Calculate: 3 Words For Loyalty Marketing in 2015

Hanifin Loyalty chose 3 words to help focus our efforts towards a successful 2015. We landed on:

Today, we share a deeper dive on the 3rd word in the series:


When the Wall Street Journal took a look at the key business issues to be reckoned with in 2015, heightened pressure on the C-Suite was among the most important themes. Most business people can relate to the unrelenting pressure felt today on financial performance and budgetary adherence. But consider this: 45 companies among the S&P 500 index replaced their CEO’s during the first 9 months of 2014, equating to a faster turnover rate than in the previous year. The reality of this trend is that pressure from investors and other stakeholders will continue to be enormous and the demands on C-Suite accountability won’t relent any time soon.


To manage marketing budgets with highest efficiency and accountability, C-Suite executives should continue to place priority on investments in data-driven marketing programs. There is no more secure place to invest marketing dollars than in financially accountable marketing programs, however, relying on measurable marketing plans won’t always translate to mean that every brand should have a loyalty program. Every brand needs to have a well planned and executed customer growth strategy, but not every outcome of the planning cycle will result in a loyalty program.


To realize the highest rate of success and return on invested marketing funds in 2015, brands should increase emphasis on program measurement. Think about what needs to change in order to Re-calculate (or Measure) the impact of your customer marketing efforts on a regular basis.


Thorough strategic planning needs to be substantiated by data analysis. Once a strategy is agreed, a measurement plan can track progress towards goals and continue to justify the supporting budgets.


The top 3 elements of a solid measurement plan include: 

  • Macro Program profitability  – Measures that capture incremental income derived as result of the program and all relevant expenses of program operations

  • Product related objectives – Measures that indicate progress versus agreed goals for individual product lines or business units participating in the program

  • Liability management – Depending on program structure, track trends in reward liability reserve and make adjustments as needed to manage the rate of reserve applied to new program earnings


One important driver of program profitability that deserves attention in 2015 is earning velocity, a core metric in the discipline of “Loyalty math”. Defined as the rate at which customers (program members) can earn value in their programs, establishing satisfaction in a member group with program earning velocity is a predecessor to building longer term program engagement.


A by-product of the shifting consumer behaviors we talked about in word #1, Re-Evaluate , consumers are demanding rewards that are easily achieved and can be used with more liquidity, at point-of-sale, for instance. We’ve also seen that consumers enjoy the social journey with some brands, and an engagement program that encourages linkage of social accounts, posting of referral, recommendations and user generated content can meet corporate objectives while diminishing the emphasis on the financial liability created by traditional points-heavy programs.


A fresh look at your program earning velocity should be a part of your planning process in 2015. You may also want to Re-Calculate your position on data capture and retention. Data is a high-risk asset, and brands need to steward the customer data they collect with highest priority. For that reason, you may want to Re-Calculate what data is really necessary to obtain from your customers.


Ask only for what you intend to use and which can benefit customers through formulation of relevant and valuable offers. Resist the temptation to ask for the kitchen sink without reason. The additional data obtained may not be actionable for marketing strategy, and simply exposes your brand to more risk if a breach should occur.


Given the importance of customer data to all parties, brands should Re-Evaluate the customer metrics used in their loyalty program dashboards, and triage the data collected from program members to better manage data collection.

Action Item:

  • Re-Calculate the member earning velocity in your customer loyalty program.

  • Focus on program profitability. Triage the data collected from members based on your clear intentions and ability to make the data actionable.

  • Make sure your measurement plans are aligned with best practice and Re-Calculate the key metrics in your dashboards.


Quote: “Confidence, like art, never comes from having all the answers; it comes from being open to all the questions” -Earl Gray Stevens