In times of crisis, how should your loyalty program be assessed?

5 min readJan 31, 2023
In times of crisis, how should your loyalty program be assessed?

Crisis and business

At this point, we have passed the dark ages of the COVID-19 crisis. The world economy is in a new period called the post-crisis period, there are many changes that are difficult to predict for businesses. During the epidemic, it was blocked everywhere, businesses’ revenue dramatically decreased. After a period of time, when some brands were able to adapt and take advantage of online shopping, revenue started to rise again. Sales continue to increase sharply, social distancing orders are gradually being removed in countries, and customers tend to return to shop strongly to compensate for the days that are not spent. And soon, the policy of injecting money to rescue the economy will gradually show its side effect of creating a period of inflation. An economic recession that now shows signs of spreading in many countries. In times of crisis, re-evaluating your loyalty program is a priority.

A recession is defined as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in, real GDP, real income, employment, industrial production, and wholesale-retail sales” according to the NBER. It can be seen that economic recession is cyclical and is an indispensable part of the world economy today.

While crises, in general, include different types of crises for instance crises COVID-19, financial crises, fuel crises, military crises, and economic crises. Economic crises have a severe effect many times more than economic recession. They are often triggered by some unexpected event, it is impossible to predict when an economic crisis will occur. All crises have consequences on the economy; when a crisis occurs, businesses directly related to the crisis will suffer the strongest impact, and gradually, it spreads to the whole economy according to the domino effect. So companies that want to survive must find a distinct way, and loyalty programs are one of the keys.

Why assess in times of crisis?

In each different phase of a crisis, consumer behavior tends to change unusually. For example, during a pandemic, consumers turn to the convenience of products. If your business cannot meet these needs, customers will quickly turn away from you. In addition, in times of crisis, the company often does not maintain the necessary human resources to maintain this program, so it is vital to re-evaluate to change accordingly.

What is the purpose of this assessment?

This assessment will analyze your loyalty program and give you specific recommendations for improving your program. We’ll look at rewards, staffing training, program operations, UX/UI, etc. After looking at all of these areas, we’ll provide you with a detailed report of our findings and what changes need to be made. Overall, an assessment can help you improve your competitive position by letting you plan, execute, and measure program performance. You may also find ways to reduce expenses, increase enrollment rates, motivate store associates, and improve the margin on goods sold. Over time, you can find better tools, solutions, and platforms for running your program.
Aspects cannot be ignored when evaluating a loyalty program
Usually, a business has reported in its business results that are enough to evaluate the effectiveness of the loyalty program. However, in order to deeply understand the causes of the values, we need to determine the effectiveness of the loyalty program. Define program-specific metrics and periodically check with your loyalty solution provider.
For any loyalty program, it’s important to establish KPIs. Here are some metrics and pledges to bear in mind while performing an assessment.

+ Activation/Engagement Rate
+ Repeat purchase rate
+ Participation Rate
+ Redemption Rate
+ Customer Retention Rate
+ Lifetime Value
+ Average Spend Per Member

The effectiveness of the loyalty solution
+ Does the program meet the goals that the provider committed to?
+ What features are useful and which are redundant?
+ When using the solution, what benefits arise?
+ Is the method of measuring and calculating appropriate?

+Does it need more new features?

How should loyalty programs be changed during a crisis?

When the economy is stable, brands are almost focused on bringing financial value ​​to customers but during the crisis, customers still need more spiritual gifts. You should convey to customers clearly that you are helping them overcome financial difficulties during this period and you’re helping them save more. Do not create the feeling rewards to stimulate greed and tempt them to buy more. Your company must act as a companion that offers the appropriate offers so that you will be with your customers; the deeper you go into the hearts of customers, the more your loyalty is. Competitors will not access and entice your customers, and on the other hand, you can also attract their customers.

Here are some methods to increase connection with customers:
+ Personal notices with empathetic content to customers and commitment to your business are always present to accompany customers in difficult times.
+ Provide rewards, reward points
+ Give customers exclusive gifts such as titles, and customized items to enhance personal connections.
+ Prioritize the programs to refund customers in difficult times so that customers can use them for other important tasks. Customers will give you much love for this understanding.
+ Stop the program to save costs?
Even though times are tough, you can’t afford to stop marketing your loyalty program. Your customers will have plenty of options available, so you must ensure your loyalty program is visible. If you suddenly end your loyalty program in the middle of a crisis, it could create an adverse reaction from members and damage your brand’s reputation. Recessions can cause customer demand to fluctuate, but you should adjust your loyalty program accordingly.

Loyalty programs helped brands get out crises

The 1981 recession was one of the deepest and longest recessions of the 20th century. As an airline, American Airlines was hit hard. American Airlines introduced its AAdvantage program to help maintain loyalty and reduce flight costs. This program gave loyal customers rewards such as free airline tickets and other incentives to encourage them to travel with American Airlines. Additionally, the AAdvantage program helped Americans understand their customers better by providing deeper analysis and insights into their passengers’ patterns. By offering customers incentives to choose American Airlines, the AAdvantage program successfully helped American Airlines remain competitive and profitable throughout the 1981 recession.

In the wake of the COVID-19 pandemic, many businesses shifted to e-commerce models. Clothing retailer Old Navy implemented their loyalty program, Old Navy Rewards, to help sustain their brand through the crisis. By rewarding loyal customers with discounts, exclusive offers, and additional points for online purchases, Old Navy was able to keep customers engaged. The program increased online sales for the company by a reported 40%, helping to ensure the business’ success during the pandemic.

It can be seen that the loyal customer program, if applied properly, will become a savior for brands during the crisis. If your business has owned a program for yourself, this is also an opportunity to re -evaluate and upgrade it. Fado Go Loyalty is also increasingly improved and learned to adapt to the volatile economy. We are trying to develop a most effective solution to help more businesses in the war of crisis survival. Keep following us for more loyalty insights.

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