July 9, 2020 CPG, Loyalty Strategy, Loyalty Trends

Going Global

Map image showing how loyalty programs can span global borders

When designing a loyalty program, it is important to consider your organization’s long-term growth plan, challenges you aim to overcome and the key segments you want to attract to your brand. Taking your loyalty program global will be a multi-dimensional endeavor and will likely be impacted by varying market conditions and cultural differences – one size does not fit all. However, following best practices will help you scale your investment for stronger returns.

This article discusses the major triggers that indicate a brand is/should move toward global expansion and things to consider in the planning stage.

 

Triggers That Indicate It’s Time to Expand Your Loyalty Program Globally

Consumers traveling or crossing borders

If your target customers are traveling across borders, you need a way to recognize them wherever they are. Their interactions with you should be consistent no matter where in the world they are and deliver a memorable experience that recognizes their loyalty to your brand. This is a challenge for all industries, but in particular for travel and financial services companies. Consumers expect more for their loyalty and for you to understand and know them… always.

 

Fragmentation

Most companies who venture to globalize their loyalty programs may already have some sort of program established in one or two markets. The trigger a company might experience is then the high cost of running programs in multiple markets. Costs are driven by fragmentation – fragmentation in technologies, agencies and misaligned structures or approaches that don’t allow them to apply best practices or learnings across the markets and drive up costs without providing returns. You also then have no ability to measure effectiveness of the programs across markets, to capitalize on new innovations tested in specific markets or to drive efficiencies based on what is working (or not working) across your markets and programs in a scalable way. This can be very expensive and frustrating!

 

Organic Signals

The move toward a global CRM or global digital marketing team may be a lagging indicator that it is time to globalize customer engagement, as the company recognizes that having a common way of doing things is better to strengthen the brand, decrease churn, drive incremental sales and capture additional market share more systematically and in a more holistic and joined up way. Having a global CRM and loyalty strategy and approach will help accelerate business outcomes.

 

Smart Loyalty Expansion Planning Considerations

Strategy

It is important to define what the business objectives are and the expected outcomes or ROI of the program over time. These should be co-created with your leadership team and your selected loyalty partner as these models ensure the approach taken will yield stronger returns from your marketing investment. Based on our experience working with leading brands, our approach produces 3X to 7X ROI. This isn’t by accident – this success comes from  global expertise, benchmarks and proprietary methods for customer engagement that are proven to work. Our SmartJourney® methodology provides a step-by-step, data-led approach for brands to drive revenue and profit with predicted results.

Once the strategy and vision are set, the program construct, or blueprint, is developed. This blueprint includes determining the best-fitting rewards range for each phase of the customer journey (from first-time purchase to aspirational rewards), paired with market program economics to ensure return.

Behind this construct is a business case – modeling out the different markets to determine expected returns, to guide decision making for which market(s) to roll out first, based on indicated metrics or targets and market dynamics (high/low competition, maturity of participating in programs, etc.).The global blueprint serves as the foundation for how to approach your loyalty business transformation, while recognizing that degrees of freedom will need to be provided to allow for some tailoring locally for specific consumer or market needs.

The following should be addressed within the global construct:

  • Value proposition of the program
  • Segmentation and tiering approach (published or unpublished to recognize your most valuable consumers)
  • Customer journeys and personalization to drive engagement
  • Enrollment and onboarding experience
  • Overall program construct and benefits
  • Earn mechanics (interactions & transactions)
  • Rewards and partnership benefits achievabilty and cost
  • From here, many companies will start with a pilot market to prove the loyalty program construct first, make any necessary adjustments, and then further expand globally.

 

Legal Requirements

Of course, when you are working with different countries, there will be differences with the various tenets of the program – such as how you collect and use data, how or where it is stored based on data residency requirements, how and which rewards can be promoted, communications to drive the desired behavior based on consumer behaviors and preferences in market, country-specific compliance requirements, etc. Holistically determining which parts of the program will be unique to a specific market, and which parts can be standard will be extremely important.

 

Cultural differences

When building out your blueprint by country, you’ll need to consider cultural nuances. Consumer behavior and motivations differ along with where they go to shop, share or interact with a community. Social channels are one area there are often significant differences by market (i.e. WeChat in China), as well as rewards that will be valuable to consumers or available based on country infrastructure.

If your customers are truly global in nature, then you may want to keep your program more uniform. Organizations like Starbucks and Hilton do a great job of keeping the program benefits and overall customer experience consistent no matter where you are. However, rewards or additional partner or program benefits can be offered to incorporate local flavor and preference.

Program currency

A question many people ask – Is it necessary to change program currencies depending on where customers are transacting? Similar to the considerations around cultural differences, currency is typically handled locally when most customers stay local. Organizations that have a more transient customer base will want one currency. In these cases the currency nuances are managed behind the scenes as part of the redemption offering and through a robust loyalty platform.

Throughout the planning process of taking your customer engagement strategy global, it is important to find a partner who will help you have a global reach, with a local feel. This needs to be done across strategy, platforms, market launch and ongoing loyalty services based on data-driven insights to optimize your program for the future and to provide a unique customer experience that feels special and represents the best of who you are as a brand.

 

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