So, how do you design a customer value management program?
Adhish Kulkarni talks to the TM Forum about program characteristics beyond standard transactional and emotional engagement vectors
Once you have settled the nature of a customer value management program, what about program characteristics, specifically those beyond the standard transactional and emotional engagement vectors? There are a number of other characteristics worth considering when comparing concept types including:
What percentage of your audience can participate? Program design plays a large role here. We have had to build programs that cover app, web and even SMS in order to ensure the widest reach is achieved. This is particularly important when you are going above-the-line with TV or other such platforms. Some clients are willing to give up reach in order to drive digital adoption, another KPI that continues to grow in importance. We have found that loyalty initiatives are able to drive the download and adoption of self-care apps at a far greater rate (up to 400% in some markets) than other media. But this does exclude customers who do not have smartphones so optimal balance between reach and digital is important to evaluate.
Points programs, while popular, end up creating issues around unused points liability which sometimes ends up on the balance sheet. If one puts in expiry time periods, there is a risk of making customers unhappy because their ‘valuable’ points have disappeared. This issue is avoidable by using mechanics like “Surprise & Delight” or moving from points to other methods of reward such as Badges.
How often do customers return to engage with the program in a specific time period? This is an important consideration in program design as certain mechanics (e.g. T-Mobile Tuesdays) have a built-in ability to entice customers back week-on-week. Meanwhile points programs with ‘boosters’ or other points giveaways entice customers to return. Offer-led programs like Three Plus in Ireland or O2 Priority Moments can struggle to drive repeat engagement if customers do not find interesting offers during their first few visits. Our research shows that typically you have two chances to engage a customer with a relevant reward, otherwise you risk losing them forever. Three Plus uses its presales of concert and sports events tickets to entice customers to return to the site.
How easy is it to refresh and tweak your program components to ensure customers remain engaged? This is a very important component in designing a program that can organically evolve and grow. This evolution goes beyond just changing rewards. Here, what we are talking about is ensuring that the program allows you to build new incentive triggers, aspirational elements, or gamification mechanics that change on a regular basis. The traditional approach of rigid rules that don’t change for years deliver programs that, over time, lose their appeal.
As a result, we see a growing number of programs that are designed to change. Orange Belgium is one such example. Their strategy of Top Topicals allows a continuous stream of relevant (but ever- changing) reasons to speak to customers. A Tier 1 carrier in Germany’s program design incorporated a regular refresh of competitions, etc. to keep customers interested. This approach succeeded in its aim for 8+ years.
How different are your program mechanics versus what’s available in the market? You always need to balance innovative mechanics which require customer education with tried and tested mechanics that customers are familiar with. This is the argument around Points vs. Badges or introducing tiers into an existing program. Differentiation can be delivered through the marketing (TMO Tuesdays does this very well, as did Orange Cinedays), rewards (a chance to win “Money-Can’t-Buy” prizes are always a winning strategy – especially via leveraging sponsorship assets), or through partners (MVP Philippines has a unique combination of petrol stations, hospitals and an electricity company for ‘earn and burn’, which is not available anywhere else in the market).
These are just five examples of the sort of things that should be evaluated when deciding on the appropriate concept design but there many more. In the end, we recommend looking at the target customer base, the external market dynamics (competition), and your internal objectives in deciding on your own concept.
So, what does this all mean for you?
First, it’s important to understand that your brand is a powerful asset which should aspire to having broad appeal across your customer communities and which cannot easily be copied by your competitors. And second, geography will influence you in different ways depending on your location.