A term that we commonly use in channel loyalty and incentive programs is the effort advantage ratio. This is the study of consumer loyalty programs and the effort a participant must undertake to achieve a loyalty program reward and how this effort impacted on attractiveness of the loyalty program for their continued participation. 

These are 7 things to consider when weighing up the Effort Advantage Ratio.

Loyalty marketing and sales activities are inextricably intertwined. Well, that is and always has been the idea anyway. In theory, both types of strategic activity work according to the same mantra; the co-creation of a solid base of loyal and valuable customers. In reality, perhaps not so much. In this blog, we set out to offer a few do’s and don’ts on how loyalty marketers and sales managers can re-think and re-sync and avoid the dreaded co-destruction of customer value.

‘Motivation’ is a complex concept, but it’s what drives loyalty. It determines why your loyalty program participants are willing to increase your share of wallet, or even go the extra mile for your business.

But how can you measure ‘motivation’? Most agencies and pundits will only tell you how to measure ‘loyalty’. Often this is done using the basic method of asking program participants ‘the only question that matters’, aka calculating your Net Promoter Score (NPS). But the science has repeatedly shown that the NPS is at best marginally related to loyalty program success.

‘Social distancing’ is a concept that most of us had never come across before the outbreak of covid-19. Now many people around the world are having to adapt their personal and professional lives radically to adhere to rules about staying at home and self-isolation.

Our human need for face to face communication and camaraderie has been put on hold indefinitely. But within days of ‘lockdown’ there was a surge in people using social media and video platforms.

The light at the end of the Covid-19 tunnel. As countries start the process of emerging from lockdown, many C-suite executives will be struggling with challenging cashflow positions and your loyalty program may still run the risk of being deemed ‘non-essential’. So, we felt we needed to go further than offer well-meant advice.

B2B Loyalty Marketing in the Post Covid-19 Era

We tend to share Motivforce’s prediction on what will happen in the loyalty marketing space at the start of every new year. The Covid 19 crisis has changed everything, including the moment when we put our thinking caps on and reflect on what is in store. Because we feel it is important for loyalty marketers to prepare for a different future:

Covid-19 is continuing to cause chaotic and challenging business conditions where many industry sectors are forced to close, suspend or modify their trading options. But now is the time to invest in your loyalty strategy. Rather than reducing focus and suspending elements of your loyalty program, this is the time for vigorous planning and innovative programme design so that companies are in the prime position to cash in on the tsunami of pent-up demand that will follow when the virus has passed.

Use the current downturn as an opportunity to conduct research among your loyalty program participants. The downturn caused by Covid-19 and government efforts to contain the pandemic is set to continue for the foreseeable future for many industry sectors. But there are ways you can turn this downtime into an opportunity for your B2B loyalty and incentive program, even if your sales have taken a nose dive.

As Covid-19 continues to create chaotic and challenging business condition’s many industry sectors have seen a collapse in sales and huge downturns in trading. Lack of sales is like a horror movie for all businesses. And if your company has a loyalty programme, how can you maintain participant engagement, when the core concept of rewarding for sales has been eliminated?

The answer is to use this downtime as an opportunity.

How can you give resellers and business partners in your distribution channel a competitive edge and persuade them to sell your products rather than those of a rival vendor?

The answer is ‘enablement’ – in other words, you need to give your resellers the skills and product knowledge to sell your solution or services effectively to their end customer. But how do you convince stakeholders to invest?

Internal misalignment often begins with a lack of a strategic vision, while clarity starts with a clear sales, marketing and loyalty strategy. Developing a cohesive strategy educates the entire company on the expectations. A clear and complete vision of the program will pre-empt a “let’s-slash-the-loyalty-budget” attitude. Educating company stakeholders is an ongoing process. Like anything else, if they don’t understand its value, you are not going to get their buy-in.

A GOOD PLACE TO START IS TO IDENTIFY A NUMBER OF COMMON MISCONCEPTIONS;

Gamification is the use of game-play mechanics for non-game applications and there are many case studies illustrating the increased motivation when game elements are incorporated into work activities. The closed nature of the audience and our access to detailed analytics allows us to precisely manage the effectiveness of the use of games in our programmes.  

Loyalty programs will increasingly reflect growing awareness of climate change and global social issues – for example members could exchange their points for ‘responsible’ rewards. And creating a Game of Thrones comms strategy could be an ideal way to grab your loyalty program participants’ attention.

At Motivforce we have been helping clients to deploy Business Partner-driven strategies in order to improve their performance, agility and profitability. Although this is still core to our business, we also work on a growing interest in measuring the impact of employees on the bottom line. Employees are arguably a company’s most valuable resource, as they are sources of innovation and knowledge and allow for competing through service excellence.

Is a loyalty program right for your business?

Like any marketing strategy, loyalty programs have a place and an ideal environment in which they should be deployed and managed. So, it is important for firms to undertake a detailed diagnostic assessment to see whether a loyalty program is the best marketing strategy for their product or service, as opposed to rushing to set up a program in the hope that it will solve all your business challenges. 

Here are 3 reasons why a loyalty program may not be right for your product or industry:

‘Social Loyalty’ has been gaining momentum over the past five years as an effective strategy to drive engagement, enablement and sales performance. Interestingly, many companies are still slow to embrace social media into their loyalty programs due to concerns that  they cannot control the conversation. However,  it is now apparent that participation,  as opposed to control, is the most effective way to drive participant behavior.

 The odds were certainly favourable for Motivforce’s latest Loyalty Leadership Forum which took place at the historic Jockey Club Rooms in Newmarket, Suffolk, home of British horseracing. Building on the unbridled success of previous Forums, the event provided an ideal opportunity for Motivforce’s loyalty experts to showcase the latest B2B loyalty trends and share their wisdom with clients and channel marketeers

Loyalty and incentive programs attract, motivate and reward your best customers and there is no doubt that they can be very powerful marketing tools – their success has been well documented in industry case studies, academic literature and loyalty marketing awards programs.

Your best customers are the ones that listen to and respond to your loyalty promise.  But delivering on that promise is highly dependent on structuring an effective program. All too often loyalty programs fail to deliver their promise not only to participants; they also fail to meet the high expectations of senior management.

Thus, to deliver on the ‘spectacle’ of a loyalty program, it’s vital we work on the ‘science’ behind it. Here are 8 key elements to applying this science.

Whilst a lot of time and money is spent creating brand and positioning, little effort is spent on developing the “loyalty avatar” that will be used to communicate to  program participants, both formally and informally.

One of the growing challenges facing all loyalty practitioners is how to drive higher levels of engagement. Traditional methods such as bonus points and bespoke communications, whilst still effective, are losing their impact, particularly when competitor loyalty programs are also engaging in these tactics.