Even With Loyalty, Timing is Everything
In the past, I have talked about using merchant-funded rewards to both reward your members and to make your program profitable. I have also spoken of goals and budgets for your program. Now let’s talk about how we tie all those things together.
Timing is EVERYTHING
When I say timing is everything, I do not mean the timing in which you give the reward to the member. That is important, just not important to this discussion. This part is about goals, budget, and the profit of your program.
The thing that links all of these elements together is holiday shopping. The fastest way to reach your goals, maximize your budget, and start to turn a profit is by launching prior to the holiday shopping rush. The somewhat common thought for many companies is that they think if they start building their program at the end of the year they can launch in Q1 of the next year. Yes, you will have a whole year of the program, but you will incur cost in one year and not see any return on your investment for several months.
The first quarter of the year comes right on the heels of the busiest shopping time of the year. The 4th quarter can account for up to half of your program’s annual revenue. By launching in Q1, you have missed the chance to recoup the bulk of what you spent to build a program—instant ROI rather than waiting for a whole year.
On top of that, by launching in Q4, you have the opportunity to see a profit from the program in the first full year of operation. Just think about that for a moment. A program that you were already planning on building can go from a cost center to a profit center twice as fast by simply starting a few months earlier.
The other important thing to think about are the overall goals of your program. You want to offer something of value to your members to increase brand loyalty. If that is a goal, then launching at a point where you will get the highest engagement is extremely important. The time at which the highest amount of your members are doing online shopping will garner the most excitement. In order to hit this window, you have to have time to build your program.
Now is the time to decide, do you want to accelerate your program by close of year? If so, you must accelerate your timeline for building and allow at least three months for it to be built. And most importantly, act now.
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.
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