Challenge
In 2021, Allergan recognized that their existing B2B rewards program, Allergan Partner Privileges (APP), was falling short in several critical areas. The program, designed to cater to boutique med spas and their medical staff, exhibited a high churn rate, particularly among the bottom 60% of accounts, where the churn rate reached 30%. This indicated a lack of engagement and satisfaction among a significant portion of their clientele. Moreover, the program’s benefits distribution was highly skewed, with 96% of accounts receiving no tangible benefits, which left many feeling undervalued and neglected. The complexity of the program further compounded these issues, making it difficult for practice members to understand and utilize the benefits effectively. Another significant challenge was ensuring the revamped program complied with the Sunshine Act, which restricts certain types of rewards to healthcare providers to prevent conflicts of interest. These issues highlighted the need for a comprehensive overhaul of the APP to make it more inclusive, engaging, and compliant.
Solution
To address these challenges, a strategic plan was devised to revamp the APP, focusing on creating a more comprehensive, engaging, and rewarding experience for all members of the med spa staff, not just the doctors and owners. The solution aimed to enhance the program’s inclusivity by recognizing and rewarding the contributions of nurses, administrative personnel, and other staff members. This approach required a fundamental shift in how rewards were structured and distributed. The revamped program emphasized transparency and simplicity to ensure all members could easily understand and engage with the program. Key components included the introduction of growth and product bonuses to incentivize incremental spending and portfolio penetration, a rebalancing of program tiers to make them more attainable, and the inclusion of soft benefits such as education, marketing resources, and analytics. These changes were designed not only to increase engagement and reduce churn but also to ensure compliance with regulatory requirements like the Sunshine Act.
Key Actions
- Customer Research and Co-Creation Sessions:
- Conducted extensive research and sessions with boutique med spas to understand their needs, challenges, and preferences.
- Enhanced Earn Structure:
- Introduced a Growth Bonus to reward incremental spend growth.
- Added a Product Bonus to encourage deeper portfolio penetration, specifically for Botox and Juvederm.
- Revised Program Tiers:
- Adjusted tier thresholds to be more attainable, reducing churn and incentivizing growth.
- Graduated high-value accounts (over $1M in annual sales) out of the APP to keep benefits relevant.
- Introduction of Soft Benefits:
- Prioritized access to virtual and in-person training for all staff members.
- Provided customizable marketing resources and expanded digital support.
- Offered analytics and performance benchmarking to help practices grow.
- Community and Individual Engagement:
- Created a peer-to-peer forum for practice staff to connect, share best practices, and build community.
- Established mentorship programs to foster continuous learning and professional development.
Outcomes
The implementation of the revamped APP program yielded significant positive outcomes that not only boosted overall sales but also strengthened the loyalty of smaller accounts. Furthermore, the program ensured that all rewards were legally appropriate and ethically sound.
- Reduced Churn: Significantly lowered the churn rate among the bottom 60% of accounts.
- Increased Engagement: Higher engagement and satisfaction levels due to inclusive rewards and community-building elements.
- Boosted Sales: Growth and product bonuses, along with revised tier thresholds, drove incremental spend and increased cross-portfolio purchasing.
- Regulatory Compliance: Ensured the rewards program adhered to the Sunshine Act, maintaining legal integrity.
Key Takeaways
This project underscores several critical insights for developing successful loyalty programs.
- Inclusivity Matters: Programs that recognize and reward all staff roles, not just doctors, are more engaging and effective.
- Clear and Attainable Rewards: Simplifying program tiers and making rewards more attainable can significantly reduce churn and drive growth.
- Community Building: Fostering a sense of community among practice members enhances engagement and loyalty.
- Comprehensive Strategy: A holistic approach that includes education, marketing support, and analytics provides substantial value to customers and drives business growth.
These takeaways illustrate the importance of a holistic, customer-centric approach in revamping loyalty programs to meet the evolving needs of the market.