This article is part of our Ultimate Guide to Loyalty Programs.
There are many decisions to be made during the planning stages for your new loyalty program.
You want to create a loyalty program that is enticing to your customers and full of value. And you also want to launch a loyalty program that engages members to the point where they become brand advocates.
There are also decisions surrounding benefits, tiers or points (or both), and will it drive enough interest to make it and keep it successful?
Will my new loyalty program produce compelling insights to personalize communications in the future?
A crucial question to answer during the planning for your new loyalty program is should we do a soft launch?
Will a soft launch allow time to work out any kinks in the program before the official launch?
Here are 3 reasons why you should conduct a soft launch of your loyalty program:
1. A Loyalty Program Soft Launch Provides Early Insights
A soft launch provides early customer insights into your program ROI, the cost of what you’re giving away, program rewards – what they are and how they’re priced, if you should offer program tiers, and what the threshold should be prior to a major launch.
A soft launch, literally, is a test run for your loyalty program. That’s a luxury timeframe where you can see what’s working, what’s not working, what needs to deleted, and what needs to be tweaked for greater impact. These early customer insights are crucial to your future official program launch.
But don’t forget that there are associated risks with a soft launch. The biggest one is whether the soft launch will accurately convey the full value of your loyalty program.
Many soft launches are stripped down versions of the bigger loyalty program vision, which doesn’t provide accurate insight into the full–blown loyalty program, and you may only get one chance to convince a consumer to participate in your loyalty program. If your soft launch isn’t compelling, you may not get soft launch members to come back later.
The overarching benefit to a soft launch is the ability to optimize your loyalty program before growing your member base.
2. You Can Target a Select Group of Loyal Customers
If you want to test your new or revamped loyalty program on a select audience, target the top 10% of your customer base and let them assess it during the soft launch. These loyal customers will offer honest feedback about the program that will help you make any necessary adjustments before the full rollout.
Using a select group of customers during the soft launch allows your brand to refine the overall program before it’s officially released.
You can even continue to solicit this type of feedback with this same group after your loyalty program officially launches to gain further insights. This method makes your new program easier to understand and increases the chance of customers enrolling.
A key point to remember with testing your loyalty program with a select group of customers is you can maintain that pilot period for as long as you want.
Just look at Canadian athletic apparel retailer Lululemon Athletica, which has been a pilot phase of its premium loyalty for more than three years.
The program carries an annual membership of $168 (Canadian dollars) and $148 U.S. dollars. The interesting thing is when Lululemon launched the test program in late 2018, the membership fee was $128.
So, Lululemon officials have found in the past three years that customers are willing to pay more for the membership because of the abundance of benefits.
Lululemon’s loyalty program elevates the best elements of the brand, which leads to highly engaged members.
Jason Scoggins, Director, Loyalty & CRM, Chipotle, told Clarus Commerce that company officials always listen to loyalty program members. Chipotle Rewards launched in 2018 and Scoggins said during the pandemic company officials observed drastic changes in consumer behavior.
“We have definitely seen customers pivot to digital ordering, particularly when it comes to order ahead for pickup,” Jason said. “We have taken these learnings and began targeting specific customer segments with bonuses to further encourage the order ahead behavior.”
3. It Helps You Optimize Your Point Economy
A point economy contains transactional, spend, and event behaviors that govern the actions your loyalty program members can take to achieve specific outcomes.
A soft launch allows you to optimize your rewards inventory by seeing which lower value rewards are most interesting to members, and which items are underperforming to better understand inventory needs.
You can also see how many points are being earned and learn about different member segments to, perhaps, create tiers to your program. Along with this, you can refine your CRM by testing different newsletter content, headlines, and cadence.
Developing and tweaking your point economy during a soft launch is critical for the future success of your program. Being able to gather this vital information about member spend, along with transactional behavior, will go a long way toward finalizing your program’s point economy.
Assessing your members’ behavior and adapting to it to create the most beneficial and value-laden program is the best action you take during the soft launch.
All of this creates and maintains interest in your program while tweaking any product/marketing strategies.
It’s All About Gathering Data
The whole concept behind having a loyalty program is to gather accurate customer data that can be used to personalize offerings that drive increased engagement with your brand.
So, the idea behind a soft launch of a loyalty program is to collect data that supports your offering and reveals any pain points you can address to make the final product even better.
By gathering member feedback early on, you can tweak your loyalty program prior to full launch.
Addressing these items before there is a larger member base will provide an enhanced experience for everyone when they join and limit customer service challenges when making changes to a live program.
A soft launch for your loyalty program will help you gain early customer insights from a select group of customers. It will also help you optimize your point economy, so you gain a better sense of how specifically to structure the rewards portion of the program.
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ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.