As a product manager at Walmart, how would you design a loyalty program?

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As a product manager at Walmart, how would you design a loyalty program?

Asked at Walmart over a year ago

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pvora1988 · Answer 1 · 2021-02-01T11:08:39+0000

Scope :

To design a loyalty program for walmart users i.e. design a program where walmart customers are incentivized to shop a walmart. Few questions I will aske here:

Is this for existing buyers or is it also to attract new customers- Will go with assumption that it is for both

Is there any loyalty progam in place which is not working or is this to be designed compltely new from scratch- Will go with assumption that it is to be completely new

Is there a specific set of users based on demgraphy, shopping habits, etc. that we need to target? No

Summarizing the scope: Need to design a loyalty programm for existing and new customers so that customers are incentivized to repearted buying from Walmart

Users and User Groups:

Exsiting Users and new users

Pain Points:

Lack of awareness about loyal program
Generic program for all user groups
Expiry of reward points
Process to redeem reward points or use is cumbersome
Lack of offers/incentives on accumulated points

Priority of the above pain points:

4, 2, 3, 5, 1

Solutions to Pain Points:

Dedicated Loyalty Program Section: A section in app will show users of their existing reward points in their account.
Recommendation Engine: Analyze the spending pattern and have a recommnedation engine in place show offers to redeem reward points based on specific user's preference. For example: if a user's buying or search history shows he has always looked elctronic gadgets, reccomendation engine should club offers using the xisting points and show offers related to elctronic items in this case.
Seamless Redmption: The interface will designed to give a semaless experience where users can add items to cart and align this with normal shopping experince
Notifications: App will notify users on expiration of reward points and also relevant offers based on point 2's recommnedation

Prioritization:

Prioritization

Features	Effort	Value	MVP	Addessing Pain Point	Commets	Priority
Dedicated Section In App	Small	Medium	No	1	This can have all the details around loyalt program and something which will keep on evolving by adding new functionalities	4
Buidling recommnedation Engine	Medium	High	Yes	2,5	Not able to utilize his reward points is the biggest issue for driving away users and hence having a customized loyalty program will help retentiona and also acquistion of more customers. Since there will already be a reccomendaton engine to enhacne shopiing experience this should not be a huge effort but the value will be high	1
Seamless Redemption	Medium	High	No	4	Allowing easy redemption and utilization of points will help in better user experience and will help in customer retention	2
Notification	Low	Medium	No	3	Make users aware of the benefits they are missing out on and also keep them updated with new offers leveraging point 2	3

Answer 2

* The app section is duly covered by pvora1988 below, hence going by the assumption that the interviewer says design a loyalty program for buyers who visit the shop physically more than online"

Clarifying questions :

1. Is this for new users or returning users ? Both

2. What is the intent of such a program, to increase sales , user engagement or user retention ? User acquisition and retention

3. Is there a timeline to create and introduce the program ? 6 months

4. Are we targeting physical customers or online customers ? Physical

5. Should we assume that the loyalty program applies to people who have registered themseleves with Walmart or should have a Walmart specific card ?

Just registered themselevs with Walmart so as to reduce the complexity.

So the question is, design a loyalty program to be introduced within 6 months for all users of Walmart who have registered themselves with Walmart, specifically for people visiting the mart in order to acquire more users and make users return.

User Personas :

Since it is a loyalty program, I am going to assume the design is for generic everybody than for a specific somebody. Is that okay ? Yes.

Pain Points :

1. A registered user visiting the mart does not know how to view the points

2. Redemption of the points

3. Expiry of the points after a certain period of time

Solutions :

Solution	Impact of the feature	Cost to build	Priority
Initiation : Provide the loyalty program user with double the points as an initiation bonus.	Medium	Low	0
Information : When the user buys stuff at Walmart and goes for billing, on keying in the phone number, a pop up appears mentioning the points and redeeming the points against the current bill.	High	Low	1
Redemption : There are multiple sections where billboards/labels are highlighted on reduced price if loyalty points are used	High	Low	4
Redemtion : A dedicated section for Loyalty program users for usage of their points on various goods.	High	Medium	3
Notification : A physical mail or text message or email sent to users mentioning their loyalty points and expiry date	High	Low	2
Notification : A discount card equivalent to dollar value listing the loyalty point equivalent sent to the user on a quarterly basis	Medium	Medium	5

Success metrics :

# of users using the loyalty points in store

# of users using the discount card

ARPU enrolled in the loyalty program

Pitfalls :

1. Dedicated section creation at every Walmart is a costly affair since need to think of the real estate, technical support, merchandise, Customer service amongst others.

2. What happens if the dollar value listing is lost and not usable by the user, need to think of alternate ways of redeeming the points.

Summary : My loyalty program would be specifically designed keeping in mind the users who prefer physical shopping, notifying them of the loyalty program itself, loyalty points whenever they bill and suggesting that the points could be used during billing is a good way to ensure more users register for the program and users return to use the program well.