TBY talks to Luis Miguel Díaz-Llaneza L., Executive President of Recompensas de Lealtad (RDL), on the key importance of defining what a company's brand stands for, the wide-ranging impact of loyalty programs, and the need for Mexican companies to diversify their trading partners.
What kind of companies do you target?
We target institutions of all sizes and in all industries. It is perhaps easier to get through to larger companies as they have more resources, a better understanding of what it takes to prioritize loyalty, and are more proactive in seeking to do something in terms of loyalty. However, small companies tend to benefit from loyalty initiatives even more than larger companies. Another key thing about loyalty is that there are two aspects to it. On the one hand, there is consumer loyalty, where we target end consumers. On the other hand, however, loyalty also entails a company’s entire value chain. From suppliers to distributors, and from key executives to line employees, a company wants them all to be loyal. We can help companies on all these fronts
What is the biggest challenge a company faces when trying to build up loyalty?
The biggest challenge, and the one thing I address from the offset with each client, is helping them have a clear idea of what their company and brand stand for. A loyalty program should truly reflect, and at the same time, augment the brand. Offering points, experiences or rewards is just part of the mechanics of a program. The real key is thinking about the brand and having the loyalty program transmit and reinforce its values
What is the difference between digital marketing and loyalty programs?
Many of our clients are a little skeptical about what we will accomplish and what will happen when we start developing their loyalty strategies. Once we get the ball rolling however, they start seeing the benefits of the loyalty program and start taking their marketing dollars from other initiatives and putting them into the loyalty program. Loyalty truly encompasses everything—and is where the company’s investment can have the most significant impact on the customers that it really targets. Digital marketing is a communication channel, while a loyalty program is a relationship strategy
Do you have future plans to expand to other countries?
When it comes to loyalty programs, their core is the intellectual property that goes into developing them. There is however, also a significant volume of operations, logistics, and other aspects that are not easily replicable from market to market. Hence, I am considering expanding internationally, but not before we ensure all local capabilities are in place, so we may offer a full-service solution like we do in Mexico. I do not want to go out there with a limited portfolio of services to offer.
What are your thoughts on the NAFTA renegotiation?
There is more concern in the market than is warranted. Certainly, we have the US President being harsh both in word and action; the agreement, however, is in place and even if he was to scratch it, it would take time for that to happen. Regardless, and most importantly, Mexico already has close ties to several regional countries, and is among the countries with the most bilateral agreements around the world; it is a matter of exploiting them and making them come to full fruition. This is a great opportunity to readdress and update the agreement, and ensure we have the best deal for everyone.
How would you assess the strategy by Mexican companies to diversify their trade partners?
Mexico has done a great job of entering bilateral agreements; it is now up to private companies to take full advantage of them. Mexico’s relationship with the US is double edged because the US is a huge market and it is great to be geographically sitting next to it. On the flip side, however, it has made Mexico complacent and prevented us from aggressively developing other markets. Thankfully, the US presidency placing such pressure on the NAFTA agreement—and in such a caustic manner—encourages many companies to start looking more aggressively for trade partners outside the US.