A Blueprint for Implementing a Successful Consumer Loyalty Program

By Michael Hemsey
May 17, 2017

When organizations approach implementing a consumer rewards program, many times it is an initiative driven by one or two C-level executives, typically the CMO or CIO. However, for a loyalty program to truly be a success, it is vital that the C-suite executives are involved, aligned, and championing the effort.

At 500friends, we have employed a framework by which companies can begin to think about how to implement a successful loyalty program, use it as a blueprint for an implementation methodology that ensures success, and use that same framework to scorecard their success over time as the program evolves.

The loyalty framework which defines the “why” can be simplified within these five broad C-level areas of focus: Enterprise, Finance, Marketing, Technology, and Operations. Not all of the five areas need to be thought of as the same priority at the same time. Instead, smart loyalty marketers can create their strategies underneath these banners, and implement them according to their budgetary needs and the cadence of their business which makes the most sense.


ENTERPRISE: The loyalty initiative has champions and teams dedicated to its success from the entire C-level suite, starting with the CEO, who will be mentioning the program’s success and financials in future earnings calls. The CFO is accountable for the economics of the program; the CMO is accountable for consumer or employee engagement in the program; the CIO is accountable for the integration of all relevant technologies, systems, and channels into the program; and the COO is accountable for the rollout of the program into the company culture. From the internal teams supporting the program, as well as the stores, branches, and locations, the company employee has the potential to interact with the consumer as the frontline champion of the program.

Enterprise also means the thoughtful roadmap of products, services, and partners that can and should be integrated into the loyalty program value proposition--both initially and over time.

FINANCE: This requires alignment on the program economics and logic behind the consumer value proposition that is offered, as well as the predicted goals and financial targets the program wishes to achieve. RFM is a traditional set of benchmarks the companies measure; so, too, is the overall carried liability, the frequency by which the currency is utilized, household penetration, longevity of a consumer relationship, awareness of brand products and services, and utilization of the same. Economics offers both a backward accounting of what has occurred, and a predictive set of benchmarks of what should occur. The underlying program economics should be foundational to all consumer Marketing, Technology, and Operational initiatives.

MARKETING: The program’s awareness and engagement of the consumer in the program, through all forms of marketing media available, both proactive and reactive to interaction with the program are important. Successful Marketing considers all potential consumer channels--email, mobile, ecommerce, call center, SMS, print, digital media, partner marketing, on-premise marketing, and the scripting by which employees and associates enroll program members and continuously promote its benefits and utility. Marketing’s goals are a continuous test-and-learn engagement strategy driven by the current and future set of insights from the data provided from the technology platform enabling the program.

TECHNOLOGY: A successful loyalty technology platform both maximizes the company’s existing assets--POS system(s), inventory system(s), data warehouse and BI tools, mobile application(s), web site(s), call center application(s), card production, data processor(s), finance and accounting system(s), training tools, ecommerce site(s), partner site(s)--as well as brings forth both the front- and back-end capabilities to give the Marketer the ability to offer programs and incentives at the consumer segment level. The technology is listening in real-time to consumer interactions with its channels, making decisions, and sending forth offers based on the Marketing & Finance strategies. A loyalty platform must be able to successfully enable these campaigns in near real-time, responding to the demand-state of the business and other driving factors (inventory, geography, weather, competitive pressures, competitive opportunities, and the like).

OPERATIONS: The best laid loyalty implementation plans only matter if you can execute against them--implement on time, on budget, within an established technical framework and roadmap, integrate Marketing and Finance mandates, and throughout the company Enterprise. Many times, Operations begins with pilot phase learnings and expands through full rollout of the enterprise, inclusive of corporate operations and the extensive retail/branch footprint. Pilot phases are inclusive of team member learnings, technology stabilization, test-and-learn marketing communications, and data analytics and insight, feeding back into ongoing campaigns and financial results. The loyalty Operations hub becomes the center of excellence to continuously drive the Enterprise mandate, through the triumvirate balance of Finance, Technology, and Marketing.


To have a well thought through and documented Enterprise plan means little if the loyalty value proposition is not built on sound Finance and Economic principles and goals. Those goals become lofty and unattainable if the Technology team cannot implement the vision through its systems and consumer channels. Those systems and channels become stagnant if not bolstered by a lifecycle and product/service Marketing communications plan which continuously and thoughtfully promotes the program engagement, through all forms of media and the company’s team members. And finally, if there is not a dedicated Operations focus to learning and continuous improvement, the loyalty program becomes stagnant and less relevant to the consumer, whose fickle attentions turn elsewhere.

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Michael F. Hemsey  

As President at 500friends, a Merkle company, I have the privilege to lead the product strategy, market expansion, loyalty technology, and client delivery teams. Together, we work with the world’s top consumer brands — helping them cultivate long, profitable relationships with their customers.

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