Implementing a successful loyalty program can be a game-changer for organisations looking to enhance customer engagement and brand loyalty. However, driving change within an organisation, especially when it revolves around an entirely new loyalty program, requires a structured change management process. By adopting a comprehensive approach to change management, companies can ensure a seamless transition, minimise resistance, and integrate the new loyalty program into the organization’s culture.
Starting the change management process
Embarking on the transformation journey involves a five-step change management process:
1. Prepare the organisation for change
2. Develop a vision and plan for change
3. Implement the change
4. Embed the change within organisational culture and practices
5. Review progress and analyse results
Step 1: Prepare the organisation for change
The first step in change management is preparing the organisation both logistically and culturally. Effective preparation involves collaboration and raising awareness of the upcoming changes. This stage is crucial for identifying potential gaps, issues, and opportunities, ensuring the organisation is ready to implement a loyalty program. Engage key stakeholders early to gather initial buy-in, reducing friction and resistance as the changes unfold. A comprehensive engagement strategy is essential at this stage.
Step 2: Develop a vision and plan for change
Creating a detailed vision and plan is pivotal in aligning the loyalty program with the business’s overall purpose. The plan should be thorough, realistic, and strategically aligned, requiring some flexibility to adapt to unforeseen circumstances. Key elements include:
– Goals: Define the purpose of the loyalty program and outline a clear, aspirational, and forward-looking direction over a 3-5 year plan.
– Culture integration: Identify how the change will become embedded in the business culture.
– Workshops: Conduct workshops with stakeholders to facilitate execution, encourage participation, and foster ideation.
– KPIs: Set clear Key Performance Indicators for measuring success at both the business and individual team levels.
– Key stakeholders: Identify roles and responsibilities for implementing the loyalty program and ensure everyone understands their part in the process.
– Scope and definitions: Clearly define the scope, phases, and key terms to avoid ambiguity.
– Training guides: Provide necessary information, training, and resources to all stakeholders, covering both soft and hard skills.
– Risk mitigation: Conduct thorough risk assessments as part of the project.
Step 3: Implement the change
The execution phase involves following the prepared steps to implement changes in the business structure, strategy, systems, and employee behaviours. This includes setting target timelines for milestones and conducting comprehensive user acceptance and system integration testing. Encourage teams to celebrate short-term wins and continuously address potential roadblocks.
Step 4: Embed the change within organisational culture and practices
Success in change management requires that the new processes become part of the daily routine. Without embedding the change, projects risk being shut down or seeing team members revert to old practices. A clear plan, continuous engagement, and communication ensure that the loyalty program is embraced across the organisation. Consideration should be given to business structures, controls, rewards/incentives, and onboarding to ensure widespread adoption.
A three-step methodology to solidify cultural change includes:
– Defining the North Star: Clarify desired behaviours aligned with business strategy and loyalty program goals.
– Describing behavioural shifts: Use a from/to/because model to explain mindset and behaviour shifts.
– Creating an action plan: Change systems, processes, and practices that uphold old behaviours to support new ones.
Step 5: Review progress and analyse results
The change management journey does not end with implementation. Regular reviews and a retrospective session are needed to measure success and identify areas for improvement. Loyalty programs should be continuously evolved based on insights and feedback, ensuring they remain relevant and beneficial.
Factors for successful loyalty program change management
Key success factors for loyalty program transformations include duration, integrity, commitment, and effort:
– Duration: Set realistic timeframes with milestone check-ins not exceeding eight weeks for reviews.
– Project team integrity: Ensure stakeholders understand roles and have the skills and experience to meet project requirements.
– Commitment: Demonstrate leadership and stakeholder commitment to the change, emphasising the importance of communication and support.
– Effort plus: Balance demands on stakeholders and evaluate if dedicated resources are necessary for successful implementation.
The influence of change management on customer experience
Loyalty programs inherently impact customer expectations and behaviours. Strategic change management plays a critical role in aligning program updates with customer needs to sustain engagement and trust.
– Behavioural impact: Communicate reward structure changes effectively to avoid unsettling customers.
– Resistance mitigation: Use transparent communication and inclusive strategies to address customer resistance.
– Emotional intelligence: Leverage EI to empathise, anticipate, and address stakeholder and customer concerns.
– Flexibility and adaptation: Adapt to market dynamics and customer feedback through agile change management approaches.
– Communication: Maintain open, frequent, and customer-centric communication to foster trust and loyalty.
– Progress tracking and success measurement: Monitor KPIs such as retention and satisfaction to evaluate the loyalty program’s impact.
Key takeaway
By focusing on a human-centric and communicative approach, organisations can navigate loyalty program changes effectively, ensuring sustained customer trust and engagement. Change management is a continuous process, requiring ongoing evaluation and adaptation to remain successful.
In the next blog we will go through navigating the role of leadership and communication in loyalty transformations.
Blogs in the series:
- Understanding loyalty in the context of change
- Mastering loyalty programs with change management theories
- Harnessing change management psychology in loyalty programs
- Navigating loyalty transformations: The role of leadership and communication
- The key steps to seamlessly integrate a loyalty program
- Adapting to change in the future: Why microchange strategies are the future of business evolution
Sources:
Tann, J. (2021). The change agent in innovation. Prometheus, vol 37 no1 p 44-53 https://www.jstor.org/stable/10.13169/prometheus.37.1.0044
Anand, N., & Barsoux, J. (2017). What Everyone Gets Wrong About Change Management, Leadership Development, Harvard Business Review. What Everyone Gets Wrong About Change Management (hbr.org)
McKinsey & Company. (2022). The future of customer loyalty programs.
Journal of Marketing. (2023). Customer Engagement During Organizational Change.
Unlock the full potential of your brand with our expert loyalty consulting services
Whether you’re looking to enhance customer engagement, boost retention, or create a world-class loyalty program, our team is here to help. Contact us today to start your journey towards building your own loyalty program strategy.
