How to avoid disloyalty. Tip #2: Be courageously generous

If you are thinking about or have started to review and revamp your customer retention/ loyalty/rewards/recognition/ benefits program (any of these), or even closing it down, then here are 3 tips to add to your strategic armour.

(You will need a thick coating of armour to sustain potential social backlash).

These tips are based on the fact that any rewards/loyalty program has the continuous tension of balancing 2 critical elements:

(1) profitable to the business and

(2) meaningful to the member.

For each there are a number of influencing factors, however given you have already worked the numbers and know why you are changing or exiting as well as listened to what your members care/don’t care about, here are the three tips:

#1. Change is a challenge for many people

#2. Be courageously generous

#3. Be simply transparent

#1. Change is a challenge

The deep emotional psyche of change is not my game, however in a general sense when members are deeply connected to a program based on a ‘currency of collection’ (point, carrot, coin, token etc), then members believe these are theirs.

They have earned them, they own them (even if the small print says the opposite).

Any impact on their reason for having joined and engaged based on collecting these ‘points’ is the biggest change to get used to. A program that changes the essence of this connection, is bound to upset its members. Which leads me to tip #2.

#2. Be courageously generous

If you are removing a benefit, be it through a partner or the structure of your program such as changing the ‘earn and burn’ rate, then you need to find it within the financials to be generous at the outset. This will help to soften the blow.

By way of example, if you remove a points program and you have a liability sitting on the books, find a way to transfer the value of the points in the form of a gift card/voucher to the members. If possible let them spend that back at your business or if that is not relevant, let them redeem it a wider selection of organisations.

In some cases the numbers might be massive (depending on your member base and the outstanding liability), however if you start with 100% generosity and execute with 100% courage – loyalty will come back in spades both in voice and value.

#3. Be simply transparent

Do I really need to explain this one?

Ok, be clear on why you are changing and crystal clear on what’s in it for me. Or expressed in another way…

“… simplify, simplify” Henry David Thoreau .

Or perhaps the quote should be “… simplify”

Humans are an adaptive bunch, yet some take longer to accept the change and others just walk, run away or shout out their views

Work  the ‘walking away’ potential into your numbers.

If you want a starting point on the numbers, we found in our benchmark loyalty study – For Love or Money 2015, that 22% of members had stopped participating in a loyalty program, 18% simply stopped participating – the passive impact and the other 4% formally asked to be removed – the active impact.

Whilst the latter can potentially be rescued (you have the opportunity to have a dialogue), the former are passively leaving, not asking just clicking/walking away.

No matter how they leave, do the numbers: Your member base = 100,000 (say) x 22% defection = 22,000 x ave sale = dollars gone!

Whilst this scenario is hypothetical, what would it mean to you if 22% of your members defected from your program and therefore your brand?

So with these 3 tips and a guide for the number crunch, when changing any or all of your program the ultimate aim to remove the ‘dis’ from disloyalty.

I’d love your point of view.

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