Part 1 – So, How Do You Design a Customer Value Management Program?

If you’re on our website and reading this blog, the chances are that either now or at one time or another in the past, you’ve been faced with the task of designing an effective Customer Value Management or Loyalty program. The question’s an obvious one; arriving at the right answer is less easily achieved.

But it’s what will eventually define and measure your success. Based on our team’s many years of experience, here’s our three-part guide to the key points you should consider at the outset.

Design and Understand your Objective

If you are thinking of a potential program, your first step should be to decide on the prime strategic objective. Identifying and understanding this overriding goal is important because it will drive many of your subsequent decisions. These include: 

  • Increasing/leading in customer satisfaction and extending tenure
    If this is your key metric, it suggests you will need to incorporate mechanics that allow customers to earn over time, show progress towards goals, be rewarded for tenure, and the need to have a framework of tiers or points that benefit customers for staying longer and spending more. 
  • Creating a self-funded/revenue generating program
    This approach serves both your loyalty and retention objectives. It suggests a need to incorporate mechanics that enable advertisers to target customer segments/personas (not specific customers!) within the program framework. At Evolving Systems, we are exploring cutting edge ideas here like allowing non-customers to use the program (because we care about eyeballs driving ad revenue) but at the same time making the offers better for loyal customers (and even having a special category for ex-customers). The idea here is that advertisers care about targeted volume and it makes it easy for you to acquire (or re-acquire lost) customers if you maintain a relationship with them. 
  • Creating differentiation and category ownership (even across borders) to enhance brand/market positioning
    This suggests incorporating a program design that enables ownership of a specific category. Pre-pandemic, cinema and movies was one such category given its universal appeal. Telcos in many markets used our Orange Wednesdays concept to build a loyalty program around film tickets (which have high perceived value and are extensively popular, but also to drive footfall in low traffic periods) and merchandise sales. Post-Pandemic, other categories remain open… such as health & wellness, food (delivery mainly) and online. At present, no telcos have done this well. 

There are a lot of other possible objectives such as increasing digital maturity, pushing convergent products or building readiness for the IoT world. Regardless of your own preference, the first step is to define where you want to go and then, after that, to fit the concept/program mechanics that best fulfil your target. Obviously, budgets and time horizons impact ambitions; for example a tactical short-term approach won’t allow you to build a powerful marketing asset like T-Mobile Tuesdays, Orange Wednesdays, etc.