Loyalty​ ​Program​ ​-​ ​Learning​ ​Launch

Challenge  I​ ​work​ ​for​ ​a​ ​large​ ​retailer.​ ​ ​We​ ​decided​ ​to​ ​implement​ ​and​ ​roll​ ​out​ ​a​ ​new​ ​loyalty​ ​program.​ ​ ​Based  on​ ​a​ ​deep​ ​understanding​ ​of​ ​customer​ ​needs,​ ​this​ ​program​ ​was​ ​designed​ ​to​ ​reduce​ ​the  customer​ ​fear​ ​of​ ​buying​ ​today​ ​only​ ​to​ ​see​ ​the​ ​product​ ​be​ ​marked​ ​down​ ​in​ ​price​ ​later​ ​on.​ ​ ​The  loyalty​ ​program​ ​gives​ ​the​ ​customer​ ​“price​ ​protection”​ ​on​ ​their​ ​purchases​ ​by​ ​providing​ ​a​ ​credit  back​ ​to​ ​the​ ​customer​ ​if​ ​their​ ​item​ ​is​ ​marked​ ​down​ ​within​ ​45​ ​days​ ​of​ ​their​ ​purchase.​ ​ ​To​ ​roll​ ​out  the​ ​program,​ ​we​ ​needed​ ​to​ ​deploy​ ​a​ ​new​ ​handheld​ ​device​ ​which​ ​allows​ ​store​ ​associates​ ​to  enroll​ ​customers​ ​in​ ​the​ ​program​ ​and​ ​to​ ​register​ ​customer​ ​transactions​ ​for​ ​protection.​ ​ ​We  needed​ ​to​ ​educate​ ​both​ ​the​ ​associates​ ​and​ ​the​ ​customers​ ​on​ ​the​ ​details​ ​of​ ​the​ ​program​ ​and​ ​the  mechanics​ ​of​ ​using​ ​the​ ​device.    Selection  Given​ ​the​ ​unknowns​ ​(customers​ ​and​ ​associates​ ​unfamiliar​ ​with​ ​both​ ​the​ ​program​ ​and​ ​the  device),​ ​we​ ​decided​ ​to​ ​do​ ​a​ ​learning​ ​launch,​ ​initially​ ​rolling​ ​the​ ​program​ ​out​ ​to​ ​a​ ​small​ ​subset​ ​of  our​ ​stores.     Application  Our​ ​aim​ ​was​ ​to​ ​test​ ​the​ ​initial​ ​version​ ​of​ ​the​ ​device​ ​and​ ​its​ ​software,​ ​as​ ​well​ ​as​ ​the​ ​initial​ ​rules​ ​of  the​ ​program​ ​itself​ ​(was​ ​45​ ​days​ ​the​ ​right​ ​time​ ​frame​ ​for​ ​price​ ​protection,​ ​for​ ​example),​ ​and​ ​the  overall​ ​customer​ ​acceptance​ ​of​ ​the​ ​program.​ ​ ​We​ ​rolled​ ​the​ ​program​ ​out​ ​to​ ​ten​ ​of​ ​our​ ​stores.  This​ ​involved​ ​creating​ ​the​ ​initial​ ​version​ ​of​ ​the​ ​device​ ​and​ ​all​ ​the​ ​associated​ ​marketing​ ​materials  for​ ​the​ ​program​ ​and​ ​educating​ ​the​ ​associates​ ​on​ ​the​ ​program​ ​rules​ ​and​ ​how​ ​to​ ​use​ ​the​ ​device.     Insight  The​ ​learning​ ​launch​ ​allowed​ ​us​ ​to​ ​validate​ ​some​ ​of​ ​our​ ​hypotheses​ ​and​ ​also​ ​identify​ ​several  problems​ ​in​ ​our​ ​initial​ ​program​ ​design​ ​and​ ​device​ ​capabilities,​ ​with​ ​minimal​ ​risk​ ​since​ ​it​ ​was​ ​only  rolled​ ​out​ ​in​ ​a​ ​small​ ​number​ ​of​ ​our​ ​stores.​ ​ ​We​ ​saw​ ​that​ ​our​ ​foundational​ ​hypothesis,​ ​that​ ​the  program​ ​promise​ ​(price​ ​protection)​ ​was​ ​extremely​ ​popular​ ​with​ ​customers.​ ​ ​We​ ​learned​ ​that​ ​this  popularity​ ​had​ ​a​ ​side​ ​effect​ ​--​ ​it​ ​gave​ ​associates​ ​something​ ​positive​ ​to​ ​discuss​ ​with​ ​the  customers,​ ​giving​ ​them​ ​an​ ​“in”​ ​with​ ​which​ ​to​ ​engage​ ​the​ ​customer.​ ​ ​This​ ​had​ ​a​ ​knock-on​ ​effect:  our​ ​associates​ ​were​ ​more​ ​enthusiastic​ ​about​ ​their​ ​work,​ ​and​ ​the​ ​store​ ​environment​ ​was  noticeably​ ​more​ ​energetic.     Interestingly,​ ​we​ ​also​ ​learned​ ​that​ ​our​ ​software​ ​on​ ​the​ ​device​ ​was​ ​lacking​ ​a​ ​key​ ​feature:  real-time​ ​reporting.​ ​ ​The​ ​associates​ ​were​ ​very​ ​competitive,​ ​amongst​ ​themselves​ ​within​ ​a​ ​single  store,​ ​and​ ​also​ ​between​ ​stores.​ ​ ​This​ ​friendly​ ​competition​ ​drove​ ​greater​ ​new​ ​member​ ​signups  and​ ​transactions​ ​registered​ ​in​ ​the​ ​program.​ ​ ​We​ ​saw​ ​this​ ​behavior​ ​and​ ​quickly​ ​rolled​ ​out​ ​a​ ​new  version​ ​of​ ​the​ ​software​ ​that​ ​allowed​ ​the​ ​individual​ ​associates​ ​to​ ​track​ ​their​ ​performance​ ​and​ ​that

of​ ​their​ ​store​ ​team​ ​versus​ ​the​ ​other​ ​associates​ ​and​ ​other​ ​stores.​ ​ ​It​ ​added​ ​to​ ​the​ ​fun,​ ​energy,  and​ ​engagement​ ​seen​ ​among​ ​the​ ​associates,​ ​and​ ​resulted​ ​in​ ​better​ ​service​ ​to​ ​their​ ​customers.    We​ ​also​ ​learned​ ​that​ ​the​ ​program​ ​was​ ​“too​ ​rich”.​ ​ ​In​ ​particular,​ ​the​ ​parameters​ ​of​ ​the​ ​program  (45​ ​day​ ​price​ ​protection​ ​and​ ​365​ ​day​ ​credit​ ​expiration)​ ​were​ ​too​ ​long,​ ​and​ ​as​ ​a​ ​result,​ ​despite  customer​ ​enthusiasm,​ ​we​ ​could​ ​not​ ​deploy​ ​the​ ​program​ ​broadly​ ​across​ ​the​ ​full​ ​fleet​ ​of​ ​stores.  Using​ ​the​ ​data​ ​we​ ​gathered​ ​during​ ​the​ ​learning​ ​launch,​ ​we​ ​were​ ​able​ ​to​ ​adjust​ ​those  parameters​ ​to​ ​find​ ​a​ ​sweet​ ​spot​ ​of​ ​value​ ​to​ ​the​ ​customer​ ​and​ ​financial​ ​viability,​ ​though​ ​it​ ​was  seen​ ​as​ ​a​ ​disappointment​ ​since​ ​customers​ ​felt​ ​they​ ​were​ ​losing​ ​part​ ​of​ ​their​ ​benefit.    Approach  The​ ​learning​ ​launch​ ​was​ ​absolutely​ ​the​ ​right​ ​tool​ ​for​ ​this​ ​scenario.​ ​ ​It​ ​allowed​ ​us​ ​to​ ​learn​ ​several  key​ ​insights​ ​in​ ​a​ ​safe,​ ​constrained​ ​environment.​ ​ ​The​ ​decision​ ​to​ ​rollout​ ​across​ ​the​ ​ten​ ​stores  was​ ​also​ ​a​ ​good​ ​one​ ​--​ ​it​ ​was​ ​small​ ​enough​ ​to​ ​be​ ​manageable​ ​and​ ​limit​ ​risk,​ ​but​ ​large​ ​enough​ ​to  bring​ ​out​ ​the​ ​competitiveness​ ​across​ ​the​ ​associates​ ​and​ ​between​ ​the​ ​stores.​ ​ ​One​ ​change​ ​I  would​ ​make​ ​in​ ​future​ ​is​ ​to​ ​anticipate​ ​a​ ​series​ ​of​ ​follow-on​ ​releases​ ​(perhaps​ ​every​ ​two​ ​weeks)  and​ ​be​ ​better​ ​prepared​ ​to​ ​make​ ​the​ ​adjustments​ ​on​ ​the​ ​fly.​ ​ ​Another​ ​general​ ​learning​ ​is​ ​that​ ​it​ ​is  always​ ​easier​ ​to​ ​make​ ​a​ ​customer​ ​offering​ ​“richer”,​ ​and​ ​more​ ​difficult​ ​to​ ​make​ ​it​ ​“stingier”!


Loyalty​ ​Program​ ​-​ ​Learning​ ​Launch Challenge I​ ​work​ ​for​ ​a​ ​large​ ​retailer.​ ​ ​We​ ​decided​ ​to​ ​implement​ ​and​ ​roll​ ​out​ ​a​ ​new​ ​loyalty​ ​program.​ ​ ​Based on​ ​a​ ​deep​ ​understanding​ ​of​ ​customer​ ​needs,​ ​this​ ​program​ ​was​ ​designed​ ​to​ ​reduce​ ​the customer​ ​fear​ ​of​ ​buying​ ​today​ ​only​ ​to​ ​see​ ​the​ ​product​ ​be​ ​marked​ ​down​ ​in​ ​price​ ​later​ ​on.​ ​ ​The loyalty​ ​program​ ​gives​ ​the​ ​customer​ ​“price​ ​protection”​ ​on​ ​their​ ​purchases​ ​by​ ​providing​ ​a​ ​credit back​ ​to​ ​the​ ​customer​ ​if​ ​their​ ​item​ ​is​ ​marked​ ​down​ ​within​ ​45​ ​days​ ​of​ ​their​ ​purchase.​ ​ ​To​ ​roll​ ​out the​ ​program,​ ​we​ ​needed​ ​to​ ​deploy​ ​a​ ​new​ ​handheld​ ​device​ ​which​ ​allows​ ​store​ ​associates​ ​to enroll​ ​customers​ ​in​ ​the​ ​program​ ​and​ ​to​ ​register​ ​customer​ ​transactions​ ​for​ ​protection.​ ​ ​We needed​ ​to​ ​educate​ ​both​ ​the​ ​associates​ ​and​ ​the​ ​customers​ ​on​ ​the​ ​details​ ​of​ ​the​ ​program​ ​and​ ​the mechanics​ ​of​ ​using​ ​the​ ​device . Selection Given​ ​the​ ​unknowns​ ​(customers​ ​and​ ​associates​ ​unfamiliar​ ​with​ ​both​ ​the​ ​program​ ​and​ ​the device),​ ​we​ ​decided​ ​to​ ​do​ ​a​ ​learning​ ​launch,​ ​initially​ ​rolling​ ​the​ ​program​ ​out​ ​to​ ​a​ ​small​ ​subset​ ​of our​ ​stores . Application Our​ ​aim​ ​was​ ​to​ ​test​ ​the​ ​initial​ ​version​ ​of​ ​the​ ​device​ ​and​ ​its​ ​software,​ ​as​ ​well​ ​as​ ​the​ ​initial​ ​rules​ ​of the​ ​program​ ​itself​ ​(was​ ​45​ ​days​ ​the​ ​right​ ​time​ ​frame​ ​for​ ​price​ ​protection,​ ​for​ ​example),​ ​and​ ​the overall​ ​customer​ ​acceptance​ ​of​ ​the​ ​program.​ ​ ​We​ ​rolled​ ​the​ ​program​ ​out​ ​to​ ​ten​ ​of​ ​our​ ​stores . This​ ​involved​ ​creating​ ​the​ ​initial​ ​version​ ​of​ ​the​ ​device​ ​and​ ​all​ ​the​ ​associated​ ​marketing​ ​materials for​ ​the​ ​program​ ​and​ ​educating​ ​the​ ​associates​ ​on​ ​the​ ​program​ ​rules​ ​and​ ​how​ ​to​ ​use​ ​the​ ​device . Insight The​ ​learning​ ​launch​ ​allowed​ ​us​ ​to​ ​validate​ ​some​ ​of​ ​our​ ​hypotheses​ ​and​ ​also​ ​identify​ ​several problems​ ​in​ ​our​ ​initial​ ​program​ ​design​ ​and​ ​device​ ​capabilities,​ ​with​ ​minimal​ ​risk​ ​since​ ​it​ ​was​ ​only rolled​ ​out​ ​in​ ​a​ ​small​ ​number​ ​of​ ​our​ ​stores.​ ​ ​We​ ​saw​ ​that​ ​our​ ​foundational​ ​hypothesis,​ ​that​ ​the program​ ​promise​ ​(price​ ​protection)​ ​was​ ​extremely​ ​popular​ ​with​ ​customers.​ ​ ​We​ ​learned​ ​that​ ​this popularity​ ​had​ ​a​ ​side​ ​effect​ ​--​ ​it​ ​gave​ ​associates​ ​something​ ​positive​ ​to​ ​discuss​ ​with​ ​the customers,​ ​giving​ ​them​ ​an​ ​“in”​ ​with​ ​which​ ​to​ ​engage​ ​the​ ​customer.​ ​ ​This​ ​had​ ​a​ ​knock - on​ ​effect : our​ ​associates​ ​were​ ​more​ ​enthusiastic​ ​about​ ​their​ ​work,​ ​and​ ​the​ ​store​ ​environment​ ​was noticeably​ ​more​ ​energetic . Interestingly,​ ​we​ ​also​ ​learned​ ​that​ ​our​ ​software​ ​on​ ​the​ ​device​ ​was​ ​lacking​ ​a​ ​key​ ​feature : real - time​ ​reporting.​ ​ ​The​ ​associates​ ​were​ ​very​ ​competitive,​ ​amongst​ ​themselves​ ​within​ ​a​ ​single store,​ ​and​ ​also​ ​between​ ​stores.​ ​ ​This​ ​friendly​ ​competition​ ​drove​ ​greater​ ​new​ ​member​ ​signups and​ ​transactions​ ​registered​ ​in​ ​the​ ​program.​ ​ ​We​ ​saw​ ​this​ ​behavior​ ​and​ ​quickly​ ​rolled​ ​out​ ​a​ ​new version​ ​of​ ​the​ ​software​ ​that​ ​allowed​ ​the​ ​individual​ ​associates​ ​to​ ​track​ ​their​ ​performance​ ​and​ ​that of​ ​their​ ​store​ ​team​ ​versus​ ​the​ ​other​ ​associates​ ​and​ ​other​ ​stores.​ ​ ​It​ ​added​ ​to​ ​the​ ​fun,​ ​energy , and​ ​engagement​ ​seen​ ​among​ ​the​ ​associates,​ ​and​ ​resulted​ ​in​ ​better​ ​service​ ​to​ ​their​ ​customers . We​ ​also​ ​learned​ ​that​ ​the​ ​program​ ​was​ ​“too​ ​rich”.​ ​ ​In​ ​particular,​ ​the​ ​parameters​ ​of​ ​the​ ​program ( 45​ ​day​ ​price​ ​protection​ ​and​ ​365​ ​day​ ​credit​ ​expiration)​ ​were​ ​too​ ​long,​ ​and​ ​as​ ​a​ ​result,​ ​despite customer​ ​enthusiasm,​ ​we​ ​could​ ​not​ ​deploy​ ​the​ ​program​ ​broadly​ ​across​ ​the​ ​full​ ​fleet​ ​of​ ​stores . Using​ ​the​ ​data​ ​we​ ​gathered​ ​during​ ​the​ ​learning​ ​launch,​ ​we​ ​were​ ​able​ ​to​ ​adjust​ ​those parameters​ ​to​ ​find​ ​a​ ​sweet​ ​spot​ ​of​ ​value​ ​to​ ​the​ ​customer​ ​and​ ​financial​ ​viability,​ ​though​ ​it​ ​was seen​ ​as​ ​a​ ​disappointment​ ​since​ ​customers​ ​felt​ ​they​ ​were​ ​losing​ ​part​ ​of​ ​their​ ​benefit . Approach The​ ​learning​ ​launch​ ​was​ ​absolutely​ ​the​ ​right​ ​tool​ ​for​ ​this​ ​scenario.​ ​ ​It​ ​allowed​ ​us​ ​to​ ​learn​ ​several key​ ​insights​ ​in​ ​a​ ​safe,​ ​constrained​ ​environment.​ ​ ​The​ ​decision​ ​to​ ​rollout​ ​across​ ​the​ ​ten​ ​stores was​ ​also​ ​a​ ​good​ ​one​ ​--​ ​it​ ​was​ ​small​ ​enough​ ​to​ ​be​ ​manageable​ ​and​ ​limit​ ​risk,​ ​but​ ​large​ ​enough​ ​to bring​ ​out​ ​the​ ​competitiveness​ ​across​ ​the​ ​associates​ ​and​ ​between​ ​the​ ​stores.​ ​ ​One​ ​change​ ​I would​ ​make​ ​in​ ​future​ ​is​ ​to​ ​anticipate​ ​a​ ​series​ ​of​ ​follow - on​ ​releases​ ​(perhaps​ ​every​ ​two​ ​weeks ) and​ ​be​ ​better​ ​prepared​ ​to​ ​make​ ​the​ ​adjustments​ ​on​ ​the​ ​fly.​ ​ ​Another​ ​general​ ​learning​ ​is​ ​that​ ​it​ ​is always​ ​easier​ ​to​ ​make​ ​a​ ​customer​ ​offering​ ​“richer”,​ ​and​ ​more​ ​difficult​ ​to​ ​make​ ​it​ ​“stingier ” !