Building executive trust in loyalty
At CORA Loyalty, we understand that executives invest in confidence.
Executive Trust, for us, is the confidence that a loyalty program is a clear profit-driver, not a cost center. The fastest route to that trust is a clear, defensible picture of where profits are generated at the customer level. This foundational view must come ahead of complex dashboards and long before any predictive models are introduced. Think of it like renovating a house: you wouldn't pick paint colors before making sure the foundation is solid. Customer-level profitability is that essential foundation.
We Start with Today's Truth.
Aggregate margins, while seemingly reassuring, often mask significant risks. The concept of an "average" customer is a myth that can lead to flawed strategies.
Our approach at CORA Loyalty first begins with meticulously calculating the contribution margin per customer (or per household), carefully netting out all rewards, discounts, and service costs. This granular view allows us to rank customers and reveal the true concentration of value within your base. In most businesses, a small segment of customers drives a disproportionately large share of profit - a distribution that vividly explains why blanket incentives often lead to margin leakage.
From this foundational analysis, two critical outputs emerge.
The first is a Profit Map. A clear segmentation of your customer base into "defend," "grow," or "let-go" categories, complete with precise counts and dollar values. This actionable map empowers you to focus resources where they will yield the greatest return.
The second is a Liability View. A comprehensive overview of outstanding points and expected redemptions, categorized by profitability tier. This foresight allows for proactive management of potential liabilities, ensuring your loyalty program remains financially sound.
Crucially, this initial phase involves no models or magic. It's simply today's ledger, meticulously cleaned and stitched together to reveal undeniable truths.
Next, we Benchmark Against Strong Managerial Judgment.
Many loyalty programs falter by comparing their strategies to weak baselines, then prematurely declaring victory. In our experience, most savvy executives see right through this.
At CORA Loyalty, our unwavering rule is to compare any proposed decision policy against what a truly smart, and experienced manager would do with the exact same information.
This comparison is based on three principles.
1. Using historically proven rules, such as spend-based tiers with well-defined guardrails, as our benchmark. This ensures our comparisons are grounded in real-world success.
2. Accurately pricing the true, fully loaded cost of rewards, fees, and labour. Transparency in costing is paramount for genuine profitability assessment.
3. Stress-testing policies in real customer segments, not in artificial blends. This ensures the robustness and applicability of our recommendations.
This rigorous framing earns respect in the boardroom because it's both fair and tough, demonstrating a commitment to tangible results.
It’s Important to Move from Dashboards to Decisions.
Dashboards are excellent at telling you what has happened. But executives, quite rightly, want to know what to do next. At CORA Loyalty, we translate the foundational insights into clear, actionable strategies around what needs to stop, shift, scale and what safeguards need to be implemented to optimize customer profitability:
Stop: Eliminate offers that inadvertently subsidize unprofitable customers, stemming margin leakage.
Shift: Reallocate heavy discounts towards low-cost nudges for on-the-fence customers, encouraging profitable engagement.
Scale: Amplify experiences or access perks for your most profitable, commitment-prone segments, deepening their loyalty.
Safeguard: Implement margin floors, cooldown periods, and abuse checks across all catalogues to protect profitability and program integrity.
Every action we recommend is accompanied by a measurable hypothesis. If there's no action, there's no metric - and no airtime in the boardroom.
This works because starting with profitability earns the mandate to implement change. Benchmarking against strong managerial judgment prevents the pitfalls of model worship. And evidence, delivered in plain language, transforms skepticism into enthusiastic sponsorship.
It's the profound difference between simply saying, "the model says so", and confidently stating, "this policy beat your best operator by 12% incremental margin in eight weeks, with capped downside."
One is a claim. The other is a decision.
If you’d like to get a conversation started, please reach out to us at loyalty@thecoragroup.com or use our contact page.
