When launching a new or revised loyalty program, it’s easy to become tempted to skip testing or validation, and just launch it already! The program has been living in your brain and worksheets for the past year, and you know down in your gut its going to be a success, so why wait? But, to the cautious go the rewards, because launching a loyalty program without customer validation can be dangerous. Here are a few things to consider in validating your loyalty program.
You should test a small group of your existing customers based on the expectation of return in your program. Don’t sample from your best customers, and don’t sample your worst customers. Sample those that would best respond to the incentives you are projecting. Loyalty programs don’t impact the customers that are already loyal. Target your test group on those who need to cross the gap into loyal customers.
This should be a no brainer, but its worth mentioning that a concrete financial model should have been created for your loyalty program. You should know the expected levels of return and be able to validate some of your return from previous success. If it’s a relaunch, you should be able to note your expected gains, and why. For new launches, aggregate campaigns and customer data can use used to create a baseline of return for your program.
Just because it’s a loyalty program does not give it a magical ROI. You know how well your customers typically respond to your campaigns, so in your message testing you should be looking to increase that number, or impact a certain cohort within your loyal base. Messaging includes the language of the offers, as well as the program itself. Doing a small rollout of the program in one market, or store, could be a great way to test return. You’ll want to test against a control group so you can validate the lift.
Nothing kills momentum faster than technical issues with your loyalty program. All POS and data connections should be monitored and reviewed during any testing period. Additionally, if you are using any mobile apps, or email automation software, it should be fully vetted in a production environment before your program goes live. Don’t trust a vendor’s assurance, or your internal IT department’s OK. Make sure you’ve seen it running. This is another great reason to do a small rollout to work out any kinks on a smaller scale.
All in all, doing a test of your loyalty program will give you great reassurance and the ability to launch in confidence. Are you looking for some help in testing or validating your program? New North can help.