Strategy into practice – nailing the implementation of a new loyalty program




The Point

Launching a new loyalty program is a rare event for most brands, though not for the team at Ellipsis. We routinely help our clients through the implementation, launch and ongoing management of their programs.

As loyalty experts, we share the pitfalls of implementing a new program, from how to choose the right platform and service provider, and develop a robust and reliable financial model, to the criticality of effective program performance management, including project management, internal end-to-end business processes and well-organised approach to data management, return on investment and KPI reporting.

Drill Down

So, you have a well-crafted customer loyalty strategy, what now?

As experienced Gladiators of the Loyalty Program Coliseum, we can examine our scars (they run deep, a culmination from working on over 120 loyalty programs in our proud history); we reflect in this article from our recent work in financial services, travel and multi-brand program launches... over the years we’ve launched a breadth of programs and have learned that loyalty program implementation is not always easy, but successful execution is critical to achieving the returns that are possible (and no doubt expected) when programs run well.

Even the most ingenious strategies and best-laid plans can be compromised (no plan survives contact with customers) so before you head into the implementation phase, be aware of the pitfalls to watch for…


1. Selecting a Loyalty Platform Provider

Choice Overload: Navigating the range of providers in the market can be difficult. How do you decide which platform and service provider will deliver your program, long-term strategy and service your business needs simultaneously? Most businesses already have access to MarTech platforms with accompanying loyalty modules, which may be cost-effective at first glance but may not be fit for purpose.

Be clear on your platform selection criteria:

  • Functionality & Budget: Obviously the platform needs to deliver the required functionality to budget, both for implementation and ongoing hosting.

  • Ease of Doing Business: Consider the platform provider’s location (and therefore availability), experience in your industry, as well as existing configurable features and integrations.

  • Innovation & Experience: Review the product roadmap and upcoming innovations that might help you avoid future bespoke development costs.

  • Ancillary Services: Do you need customer services to support, campaign management tools, self-serve set-up, or real-time reporting and analytics?


Ellipsis Tip: Don’t invest in a Porsche if your program only needs Vespa horsepower. If your existing tech partner has loyalty capabilities, do your due diligence to determine if they’re the best option or if there are better alternatives, for now, and future, when your program matures.



2. Financial Model

Presumably, your financial model secured business case approval for your new program, so make sure you maintain a strong grasp of the costs and value attributed to core elements of the CVP. Know how you’ll measure success. Even with the most effective pre-planning, various factors will change (at implementation and after launch) to impact your Return on Loyalty®:

Rewards Costs: Whether discounts on your own products or partner-sourced, the cost of rewards can change, affecting program affordability and customer value. As costs change, you need to quickly identify less impactful features and rewards to deprioritise if necessary. It’s better to reprioritise now than be forced to devalue the customer proposition soon after launch.

Resource: To run your program effectively, you may need more support services than originally planned, particularly as your program will touch finance, customer services, tech and operations, product, retail, marketing – the list goes on. Whether this resource is available in-house or from your provider, it obviously increases your program’s operating expenses.

Platform & Servicing: Scope creep is real, and more common than we’d like. You don’t always have all the answers during the program design phase and there’s often someone, somewhere who has a last-minute bright idea for consideration. Unfortunately, when scope creeps, available funds don’t seem to creep in the same direction and the natural reaction is to descope or shift program features to a ‘phase 2.’ There are various risks to this approach:

  • To decide whether to descope or delay, you need to quickly quantify immediate and longer-term impacts.

  • Descoped or delayed features may bring opportunity costs, and added complexity of new features may increase fees for hosting, reporting and customer servicing.

  • Phase 2 often doesn’t happen.

Program Assumptions: Hypotheses that underpin the program success metrics should be well validated. If you then need to make changes at implementation, you already know how specific features will positively or negatively affect customer experience, behaviour, and engagement, impacting KPIs in your financial model.


Ellipsis Tip: Prioritise program features based on financial viability, the value to the customer and behaviours (and outcomes) the customer delivered. Lower impact features may have to come later if you come under time or cost pressure.



3. Project Management

It’s a no-brainer, but even a simple program with an efficient provider will require someone to ensure stakeholders meet deliverables and deadlines to launch on time. Implementation projects are often delayed due to unexpected changes in scope, tech integration complexities, limited access to stakeholders for decisions or approvals, and lack or loss of essential resources.

An effective PM is worth their weight in gold, to oversee the provider and ideally, with knowledge of your business and operating model, navigate challenges to reduce the distraction to the business.

Your customer loyalty program will (and should) span many internal business functions, so don’t underestimate the breadth of input required to implement. For this reason, we often wear many hats during these projects – we’ve pivoted between project manager, business analyst and test manager, to legal and compliance, partnership management and customer services (chief cook and bottle washer)!

Ellipsis Tip: Invest in the Project Management resource with a strong grasp of your business needs and program requirements. They will deliver a solid return simply by ensuring your program launches on time, on budget.



4. Business Requirements Documentation

As your program extends to multiple business units and partners, you need a central source of truth that defines all end-to-end processes. Producing an internal Business Requirements Document is not for the faint-hearted but is crucial. Here’s why:

Platform BRD: Your provider will prepare a BRD defining features and system requirements but cannot (and should not) document the ongoing internal processes for the smooth operation of your program. For safety, you may want to avoid your platform provider being the primary source of your program IP.

Business Continuity: The BRD should ensure internal and external teams follow essential protocols to mitigate risks, ensure industry compliance, and significantly reduce the time and effort in onboarding new stakeholders now, and in the future.


Ellipsis Tip: Start drafting the BRD early, at the scoping stage when you are close to the detail. Update often, as you identify additional and enhanced procedures after launch, so you don’t lose central knowledge and IP.



5. Data & Reporting

No matter how much consideration you give to program data and reporting requirements before launch, something will get missed. You want to track your Return on Loyalty® and don’t realise until post-launch how many additional data sources you need to demonstrate success. Or early program reports glean interesting hypotheses that require further analysis.

Have a strong understanding of your provider’s data structure, reporting capabilities and flexibility. Most companies don’t have the luxury of internal data scientists, and even with in-house analysts, gaining access is gold-dust.

If you are going to rely on reporting tools that accompany the loyalty platform, watch out:

  • Your platform provider may not be able to identify or map all your data sources and reporting requirements. You know your program KPIs so ensure the relevant reports can be facilitated in the format and frequency you’ll need.

  • If there’s a self-serve reporting tool don’t suffer death by demo. Ask for the user guide and pre-launch access with sample data so you can experiment to check standard reports meet your needs.

  • Understand your data sources that are not integrated into your platform provider. For example, how are you going to collate web and email marketing performance stats (probably from two separate platforms), and marry them to your program data? Naturally the more data sources, the more convoluted the reporting process becomes.

  • You’ll need direct and regular access to your program data, and this should be readily available in a secure form. You shouldn’t have to pay your provider for the privilege of accessing your customer and program data!


Ellipsis Tip: Identify all essential sources and data required to monitor program KPIs, and ensure these reports are available, or make sure you have access to your program data via an alternative solution.



6. User Acceptance Testing

Your program has been built, but wait, it’s time for the dreaded UAT! Another crucial implementation project deliverable that’s commonly underestimated. If not conducted properly you’re left dealing with teething issues and customer complaints after launch.

Testing the Technical Requirements: Don’t allow the provider’s BRD to be the sole basis of your test plan. UAT should validate that program requirements are met and all aspects of the customer experience should be tested. Don’t forget non-customer facing elements too, for example, how can you test the financial reporting or back-end processes, in advance?

Devising a Test Plan: If you are close to the program detail, you are the best choice to create the user test scenarios but get a second (and third) opinion so nothing gets missed.

Conducting the Tests: When it comes to the crunch, engage testers who are unfamiliar with the program design and expected customer experience. Their fresh eyes will spot anomalies that don’t align with the use cases and test plan.


You’d think, with all these steps covered, you’re good to go. We’re here to help, so please get in touch


We are Ellipsis, Customer Loyalty Consultants. We use Customer Science® to understand, manage and grow customer value.



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