Guest Article

2020 Calls For Changes to Loyalty Programs To Get Results

When people were busily celebrating the arrival of 2020 the by now familiar Corona was a minor blip in far off Wuhan. Three months later it is a Zeppelin whose shadow darkens the entire world, especially business and commerce.

In this situation the year 2020 calls for loyalty programs with a different approach to get results. The old points and rewards system no longer earns you loyalty.

Consider a study that shows that two-thirds of customers are loyal to a brand if it takes a public stance on social issues. Corona is a social issue as much as it is an economic and health issue. However, it has also proved to be a great leveler: it has brought mighty governments to its knees and it has become a block for the business of all types and sizes across the world. It is not a time for businesses that serve other businesses to bring down the shutters until the Coronavirus subsides.

It is a time to get going with a changed loyalty program to get results now and later on in the post COVID era.

The money crunch

From governments at the top to small-time traders, everyone is facing a money crunch and the situation post Covid19 is not likely to be bright. You face a crisis because cash flow has virtually dried up and you depend on your wholesalers, distributors and bulk customers to pay for what they have purchased.

However, stop to consider. They are in a similar situation. You can insist on payment and get it but it comes with the risk of losing goodwill. Take a leaf out of the US Government’s book. US corporations now have the facility of delaying payment of taxes up to $ 10 million for an extra 90 days. Deferment, much as it sounds painful, is a good idea. Help your buyers withstand the Covid19 situation by offering to extend payment terms or fixing an installment plan. This is the first step. You can do a bit more to concentrate on the loyalty you have earned so far.

A Deloitte paper showing a survey by Tsinghua and Peking Universities concludes that 85 percent of SMEs in China will run out of cash within two months if Coronavirus pandemic continues.

Help your sellers sell

The normal chain is for manufacturers or wholesalers to leave it to dealers, distributors, and retailers to get products moving. However, in lockdown, they are faced with issues. They may not have enough stocks. They may be unable to reach retail buyers or retailers. They may need permissions to operate if they deal in essential commodities. You take the call to go out of the way to make sure you keep them well stocked and then assist with permissions wherever possible to keep supply lines and retail lines open. This will echo in end-customer loyalty as well but your action binds you with your distributor-dealer-retailer network.

Plus, your help will help your distributors/buyers to pay you. Your loyalty expert can surely craft a suitable strategy for you. For instance, you could offer cash incentives and discounts to those who pay early and fast. Those who wish to delay payments may do so by paying interest. The point is to keep business alive and moving.

Now is a good time to know your distributors and dealers

Now is a good time to get to know your buyers well. If your business operates on the wholesaler-distributor-dealer-retailer model you could be isolated from those farther down the chain. Get to know them by starting a campaign with your immediate wholesaler who happens to be the primary buyer and then the secondary buyers down the line.

Surveys, questionnaires, comments and everything else that you or your loyalty expert can think of will help you to gain valuable data. You could get valuable points on what they expect of you in these times of the Corona crisis. Respond positively with a suitable loyalty program and you build a core team of faithful sellers.


Possibly you derive insights from the loyalty surveys you carry out. This could be the input to craft future loyalty stratagems such as offering binding contracts now for guaranteed offtakes that will guarantee you cash flow in the future. One assumption is that your buyers have strained financial resources. On the other hand, it is also possible that some have cash reserves that you can call upon to finance your operations. Ask for their help and offer rewards crafted by your loyalty expert.

What if your employees

This is a difficult conundrum. You could ask them to go on unpaid leave, much to their dislike. It will probably lead to their finding greener pastures elsewhere and you will face the prospect of fresh hires that do not know the ropes. You need their loyalty and support in these tough times.

Would you want them to work at a reduced pay? Should you ask them to work at half pay now and promise to pay the balance once the situation improves along with a bonus? It certainly helps to hold a meeting, probably a teleconferencing meeting along with your team to determine the best way to keep employees by your side.

The easiest way is to go with the lockdown and lockdown your business as well and enjoy the vacation. However, like the proverbial grasshopper, you will have a tough time in the post COVID winter. It is better to labor like the ant, work towards all-round loyalty and maintain momentum.

About The Author:

Rakshit is a content marketer at LoyaltyXpert, a loyalty program company in India. He holds spectacular skills in loyalty programs, marketing, and customer retention.

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