4 Proven Tactics to Get the Most out of Rewards in 2021
Rewards are among your most powerful and cost-effective mechanisms for engaging your customers and improving acquisition, product adoption, and revenue. . But what happens when the goals and positioning of the rewards program are disconnected from your financial institution's strategic vision?
Failure to approach rewards strategically from the very beginning often creates a substantial impact on the program’s effectiveness and the financial institution's support of these programs, which usually leads to the institution failing to achieve its goals at all!
Step 1 - Align your Marketing Goals to Specific Business Goals
All marketing programs should begin with the financial institution‘s goals and strategies -- loyalty and rewards programs are no exception. These should tie to measurable business outcomes and must include financial and quantitative measures wherever possible, which is important for both measurement and focus. Surprisingly, these goals are typically independent of rewards or even marketing. These goals relate to defining desired success for the institution (e.g., growth targets, profitability, engagement, low cost deposits, new loans, etc.)
Step 2 - Identify Marketing Strategies and Tactics to Deliver on those Goals
Effective marketing strategies are rarely one dimensional. Generally, marketing strategies will employ a powerful combination of tools and tactics from brand marketing and communications to deployment of tools and methods to real world execution and everything in between. Any one of those elements may include multiple workstreams. For example, communications may include online and print advertising, collateral, and event participation, in addition to others. The winning strategy will orchestrate all the available plays needed to deliver success.
Step 3 - Develop a Multi-Year Rewards Strategy, Execution Plan, and Budget
A program definition, approach, and budget (“proposal package”) should be developed with a critical treatment of cost, benefits, resourcing, governance, ROI, and budget. Programs and budgets should be developed with a 3-5-year time horizon as nearly any new program or product needs to be perfected over time and will require spreading early costs over a reasonable recovery period. Do not forget to account for uncertainty and the need to iterate the program based on real world learnings.
Step 4 - Secure Organizational Alignment and Commitment
It is often said that the number one reason for a program’s failure is lack of effective executive sponsorship, poor organizational alignment, and flawed expectation-setting. This is easy to believe when one considers that the work in getting a project to a successful conclusion involves all the work that occurs after the project is approved – whether access to precious resources, ensuring ongoing organizational commitments are met, knocking down project roadblocks, and so much more. Keeping a program front and center for the C-suite is hard enough, but keeping a project marching forward in a complex organization is downright daunting.
Rewards can be powerful enablers, but they may only succeed when the program is positioned effectively and for success from the very beginning. Organizations are rational and will gravitate toward compelling investment cases that align to the institution’s strategy and priorities, especially when internal support for the program is strong and a senior champion is willing to take on the success of the program. Setting the right foundation and positioning the program for success from the very beginning will both dramatically increase the likelihood of success and set the stage for the long-term success of the initiatives.
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