The answer is yes. And no.

It is a question I often get at events and conferences or just speaking to clients. But the answer is not straightforward. However, there are a few guidelines to follow:

Do you have more than discounts to offer?

Yes
➜ Go ahead and start identifying the potential benefit for your business. If you don’t know how if it makes a loyalty program beneficial, you should either work harder and be more creative to generate value – or simply skip the idea.

No
➜ Then use that for propositioning to sign-ups to your customers. Don’t be ashamed – everybody likes a discount! And it drives sales. But does it require a loyalty program as such? Not really.

Do you have stores?

Yes
➜ Then a loyalty program can be of great advantage, because it transforms unknown people to known customers. It is not only driving additional sales and store traffic, but it also allows you to collect data on an individual level.
No
➜ If you are a pure online player, you will already hold data on an individual level. So, in this case you need to push for marketing permissions from the customer. And this is doable – regardless of having a loyalty program or not.

Do you have a predictive data analysis set-up?

Yes (only a few can really claim this)
➜ Go ahead. Then you can optimize the value of the program.

No (like most businesses)

➜ You have two options: Get started soon or face a struggle. If your business only has a mirror-looking Business Intelligence set-up (or less), you should REALLY REALLY consider whether it is worth the investment.

A piece of advice? Look for a standardized predictive analytics/AI tool, that helps get you started and automates the processes. And I’m not talking about a pure web recommendation engine, but a tool that uses all accessible sources, is preconfigured to some extent, and offer a fast implementation process. If you do not do this, your investment in time and resources are substantial. You might be able to take it further, but you miss out on value and learnings if you do not choose a fast-time-to-market tool.

Do you have a lot of permissions and do marketing automation?

Yes (I mean REAL automation – not just a welcome program and a newsletter?)
➜ Hurry up and get started. You have a solid foundation if you already run browse abandonment flows, basket abandonment, customer satisfaction surveys and win back flows. At least if the data generated and enabled are connected. Then a loyalty program can take you to the next level.

No

➜ You might have a lot of easier actions to choose from first. Start focusing on permission collection, as volume is key to making a solid business case for the investment. Second, start collecting some of the low-hanging fruits. There is a number a rather easy yet high value marketing automation efforts that supports the customer journey. If you know your business, you will probably be able to deduct a number of key triggers in a customer mindset; welcoming a customer, recognizing them, start using rule based logic to personalize the content or products you target them with. This is often hard to do on a product level, but is normally feasible on content, brand or category level. And then don’t do everything at once – start with your top 10. I’d claim, that most business using marketing automation doesn’t need more than 15-20 flows. But using rules, logic and recommendations in those flows can result in extremely individualized communication.

Marketing automation is the term we often use, but honestly, we should be talking more about “communication automation”. Businesses should explore how to target communication to customers that haven’t given their permission yet. Off course it is a balance to comply with marketing law, but on the other hand, service information doesn’t have to be dull.

So, do I?

Yes. And no.

No matter what YOU answered to the questions above, you could consider moving fast into a real 1:1 dialog based on the customer’s behavior with predictive analytics and marketing automation. A hint? Check out ArmstrongOne.io