Budget Planning – Customer Loyalty Programs
As a business leader for a loyalty program, securing and getting approval for a budget can be challenging. If you are starting a new program, it is often difficult to estimate both revenue and expenses. When you are in your initial planning phase before you go out to RFP, soliciting a variety of vendors to help establish budget is a really good idea. If your vendor has similar programs to yours, they should have a lot of data on expenses, conversion rates, ramp-up periods, and revenue. DBG Loyalty has been in business for 13 years, and sees very consistent stats across programs. Your loyalty vendor obviously can’t disclose the program name; however, they can certainly disclose the type of program. Knowing a bank, cell phone provider, or retailer of similar size provides you with an estimate for your projections. If you interview your loyalty provider well you will also be able to gauge valuable information like development work, database work, length of project, and customer support. Once you have this information, estimating your labor cost should be fairly easy.
A Phased Budget Approach
A great tip for getting budget is to go in with a phased approach. Generally, most vendors will have a setup fee and monthly maintenance fees. You should have an idea of your budget for marketing. Your marketing team can give you a strong estimate for advertising dollars for a new product launch. If you have interviewed your technology provider well, you will have a good idea of your labor needs. Your phased approach will include initial set up fees and phase-one development. Since you have already interviewed your technology vendor, you should have a good idea of your timelines and milestone technical and business requirements. Aligning your goals with your technology is the difference between success and failure in most cases. The phased approach doesn’t work if your phases don’t match budget and business goals. There is no need to scramble with last-minute needs and approvals. If you pre-planned well, your program will go live and begin to generate income. At this point, you certainly have a more compelling case to get a higher budget.
If you plan early, you will have a stronger position for negotiating once you are in the RFP process. You will also have gained valuable information from each of your vendors which will improve your RFP questions. Once you select a vendor, everything will fall into place and your budget planning will definitely pay off.
DBG Loyalty is a leading innovator in loyalty and rewards marketing. DBG was founded in 2002 because the industry was looking for a trusted technology leader who could develop and establish consumer loyalty programs. DBG has customer relationships which span from the time of inception.
and loyalty solutions.
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