Ending a loyalty program is a tricky proposition. You risk alienating longtime best customers who have become invested in the program, and in the age of social media, the public relations backlash can be both swift and merciless. Having a solid exit strategy in place that details such best practices as over-communicating the sun-setting process and anticipating the rush of last-minute redemptions is critical to minimizing the negative fallout. As the Coca-Cola company prepares to shutter its long-running My Coke Rewards program in favor of a new mobile-oriented offer, the company is demonstrating another key exit strategy best practice: targeted generosity.
By Rick Ferguson
Coca-Cola made the announcement that they would donate unredeemed rewards points to charity on their blog:
“When Coca-Cola announced plans to sunset its longstanding loyalty program My Coke Rewards (MCR) to make way for new ways to engage with consumers, it shared that it would be making a donation to charity with the remaining MCR points. MCR members voted on how unused points should be donated to benefit communities across America, picking from a range of donation categories – empowerment, environment and the winning category, education. Two organizations committed to educating and developing young people, Boys & Girls Clubs of America and Junior Achievement USA, each will receive a $1 million donation from Coca-Cola North America. Additionally, 10 percent of each donation will be designated for the Metro Atlanta chapters.”
This, gentle readers, is how you end a loyalty program: take the inevitable backlash with as much aplomb as you can muster, don’t apologize or over-explain – and when the time is ripe, engage them in the process. The best practice of “targeted generosity” when ending a loyalty program usually means that the company ending the program provides potentially disgruntled members with a little dopamine burst by allowing them extra time to redeem their remaining points balance, or perhaps proactively rounding up their balances to the next redemption level.
In this case, Coca-Cola has instead allowed members to engage in altruism, rather than self-gratification, by inviting them to vote on where those unredeemed loyalty points could do the most good. In addition to the blanket donations noted above, the company also in March of this year launched a new platform called Coca-Cola Give to allow members to redeem their reward codes to help local schools and charities – including donations to aid victims of Hurricane’s Harvey and Irma.
Taken together, these two initiatives represent a classic case study on how to end a loyalty program successfully. The moves also bode well for the upcoming launch of Coca-Cola’s new mobile rewards program. We’re looking forward to seeing what the company does next.
Rick Ferguson is Editor in Chief of the Wise Marketer Group and is a Certified Loyalty Marketing Professional (CLMP).