For retailers looking to scale up from a regional loyalty program to an international one, the process isn’t as simple as translating existing offerings market by market. To be successful, you need to create an expansion plan rooted in a deep understanding of both global audience preferences and keen awareness of region-specific data and privacy concerns.
The increased savings and improved customer experiences that loyalty programs can offer has universal appeal for consumers: According to Forrester data, nearly three-quarters of online adults in China, France, Germany, the U.K. and the U.S. belong to at least one loyalty program. Given this intercontinental interest, marketers are embracing the opportunity (and willing to face the accompanying challenges) of taking their programs abroad. And why not? Loyalty program members tend to be a highly engaged segment of customers who are more likely to repeat purchases, expand their relationship with a brand and recommend a retailer to friends and family.
Unfortunately, scaling from a regional to global program isn’t as simple as translating existing offerings market by market. To be successful, retailers need to create deliberate expansion plans rooted in both a deep understanding of their global audience’s preferences and a number of region-specific data and privacy concerns. So where should you start?
A good first step is determining how your program strategy and execution will be managed. Global expansion can be executed with two models: a global loyalty center of excellence (CoE) or a distributed approach.
A global loyalty CoE helps anchor strategy development and program management to one centralized team, which allows consumers to maintain the same status level or ability to earn and redeem points across borders. The CoE approach is most effective for industries like financial services or travel and hospitality. It requires increased governance and diligence around regional regulations, but allows for more efficient test-and-learn opportunities when designing the program.
A distributed approach utilizes a separate program design, structure and strategy for each market. This model, which is best for industries like quick service restaurants and retail, allows for faster implementation and more flexibility with program design, as well as mechanics that can be tailored to each market’s regulations. With a distributed approach, consumers’ earn and burn activities may be limited by market boundaries, which requires marketers to coordinate the systems and databases of each market to most effectively measure overall impact for the brand.
Regardless of which approach you choose, a successful global loyalty program expansion hinges on attention to local detail. Regional trends exist but are not all encompassing. North America and Europe may be the most mature markets for loyalty, but others are developing bigger appetites for rewards beyond instant discounts. In China, for example, transactional programs currently prevail, but some brands have found recent success engaging consumers beyond the purchase by integrating program platforms with popular mobile apps like WeChat. Here are a few best practices to keep in mind that will help you appeal to local customers and streamline your strategy and execution.
Understand what drives consumer loyalty in each market.
Just because mobile offer delivery works well in Europe, that doesn’t mean the same engagement levels can be expected across all markets. To grow your program’s appeal, use voice-of-the-customer surveys to understand what consumers are responding to and adjust your benefits mix accordingly. And to understand local consumer behavior like media consumption and purchase behaviors, be sure to partner with your local customer insights team or a third-party resource if you’re entering a new market.
Get smart about regional data and privacy concerns.
Marketers need to be hyperaware of regional data and privacy regulations when dealing with consumer information. These rules apply to loyalty programs and strategies because they dictate how customer data can be collected, stored and used. The most obvious example is the European Union’s General Data Protection Regulation (GDPR), but there are many other country-specific regulations that dictate what product categories can be promoted or offered for redemption. To navigate local regulations, team up with your security and risk colleagues early in the planning process.
Find out how a third-party loyalty provider can support global execution.
Many vendors that provide loyalty management, marketing and strategy support have experience working with global implementations. When selecting a partner, determine how equipped they are to help you tackle your loyalty program deployment by asking questions like where their account teams sit and where their data centers are located. This will help to gauge global expertise and compliance experience. Also find out if they have an established global delivery model for implementation and request examples of brands they’ve worked with in your target region(s).
The amount of prep work required before going global with your loyalty initiative may seem excessive, but cutting corners can risk diluting the success you’ve built in your home market. Putting in the extra effort will help you keep up with market demand and find, build and deepen relationships with your most valuable customers — no matter their geographic location.