KN: Good evening. Katarzyna Nawrocka, with ‘Loyalty Schemes at Night’. Today we’ll be discussing whether a loyalty scheme is the right solution for your business. And my guest today, Agata Kisło, will be answering that question for you.

AK: Good evening, everyone.

KN: Agata, let’s imagine a situation where I, as a client, come to you, an expert, and ask you this first, basic question: „Would a loyalty scheme be useful for my business?”.

AK: Kasia, in our line of work, we come across more than just these kinds of questions. In the first stage of the tender process, we also get asked things like „isn’t my business too small?” and „do I have enough revenue in my business to organise a loyalty scheme like this?” and the answer isn’t straightforward, as it needs to be considered in terms of cost-effectiveness and the partner we choose to organise such a programme. When it comes to cost-effectiveness, there are two factors at play: efficiency and effectiveness.

KN: Efficiency – what does that mean?

AK: Effectiveness, or the return on our investment. When it comes to effectiveness, it’s simpler here, because we know that a programme will be effective if it achieves 100 per cent of its intended target, whilst efficiency refers to profitability – assuming that the market incentive rate is, for example, from half a per cent at petrol stations to 15 per cent for luxury goods, and our programme yields a 4 per cent return on investment – that is, a dozen or so zlotys per consumer – then we know the programme isn’t cost-effective and isn’t suitable for our business. And that’s when we turn to a lottery or a competition. However, we organise programmes for both Polish businesses and international corporations, so, as I mentioned at the start, if the answer isn’t clear-cut, you need to analyse your marketing budget – and your sales budget too – over the long term, and ask yourself whether you’re ready for such a significant investment.

KN: And a big change, because I suspect this is also quite a significant change for the company. But once we’ve established that, yes, a loyalty scheme is a very good idea for my company, how do I go about implementing it?

AK: Many people think that the implementation phase ends with the signing of the contract. Well, it doesn’t. Signing the contract is just the first step towards implementation. Implementation is also time-consuming and can sometimes take anywhere from two months to as long as half a year. We have to go through defining the programme’s objectives, dealing with legal and tax issues, addressing IT matters – above all, preparing our own IT systems and the client’s systems. So whilst this process is time-consuming, it also delivers results, and at this point we embark on a journey that we will continue to follow.

KN: Exactly, so how am I supposed to check whether my company’s IT department is up to the job?