Going green has two meanings. One is the obvious point about being eco-friendly. The other is of seeing the green go – i.e. the $$$ spend happening. While the jury is out on whether Loyalty Programs are worth the moolah that is spent on them, we aim to look at ways to run an entirely cost-effective loyalty program. I would like to call it Low Cost Loyalty (LCL).
Cost heads for Loyalty

There are various costs that go into the running of a successful loyalty program. Of these, some are absolutely essential such as the software that runs it, while most of them contribute to the flab. The various cost heads for a loyalty program include:

IT:You need the basic software to run your loyalty program. This is the corner-stone of any loyalty program. Apart from the base license cost for the software, there are additional costs of hosting it, the maintenance of it and the regular updates and patches that also cost you money.
Service Center:

You have customers and customers have problems. And this is where your service center comes into picture. The service center is the entity that your customers turn to when they have an issue or are faced with a problem on their loyalty program. Across the world and across industries, service centers are extremely resource intensive. More so if you have global operations that require you to have a 24×7 service center or a more evolved follow-the-sun model. Either ways, you end up having a sizeable number of service center staff.

Fulfillment:
There are the welcome kits, brochures, pamphlets, membership guides, loyalty cards etc. that you would like to give to your members. Loyalty programs around the world try to out-do each other in the design and quality of these collaterals. And in doing so, they spend tons of dollars on it. Apart from the creation of these collaterals, there is the cost of the external agency that does the packaging and shipping of these.

Loyalty Management Staff:
This may be a cost head from an organizational view-point but actually this will not have a major impact on your bottom-line. Typically, the loyalty department comprises of 3-5 people and is usually a part of the marketing team. So the costs, though they exist, are not pronounced.

An analysis of the cost heads clearly identifies the top spenders – IT, Service Center and Fulfillment. Let us look at a 3 step way to reduce or eliminate these costs.

Get a good IT solution from a good vendor
The solution you select will have a great impact on your savings. It should be a solution that is world-class, requires very little IT involvement to make business changes, can be configured easily by your business team and can cater to your growing needs. Furthermore, it should be from a vendor who is there in this business for the long term and is committed to enriching this product to cater to the latest developments in the field of loyalty. A key decision making point in selecting the vendor (in addition to the quality of the product) should be that the vendor should be big enough for you to trust its future existence but small enough for you to matter to it. If you select a very large vendor, chances are that you would be one of the many customers it has and your voice may not be heard.

Create an online help – an e-CRM solution
This is a very powerful tool. Not only does it eliminate the need for a service center, it also enables your members to benefit from a self-help solution. Consequently, the amount of time they have to wait from the creation of a trouble ticket to its final resolution can be reduced. This will increase your customer satisfaction significantly and make your loyalty program more appealing. You may build it in-house or you may have your loyalty system vendor build it for you. Remember, about 80% of people who use your loyalty program are tech-savvy and so will relate to this approach of yours.

Do away with all collaterals
Except for the loyalty card, all other collaterals that you send to your members, in most of the cases, end up in the recycle bin. This is lost money – for you. The smart way to counter this would be to give your members the ability to print their card and make all other collaterals available online that can be accessed at the touch of a button.

Conclusion
Smart decisions by the loyalty team can not only reduce the impact on the environment but also save you a significant amount of costs. All these savings can then be channeled into your loyalty program to make it more attractive.