Loyalty Program Managers, listen up! As guardians of your company's loyalty program, you are responsible for building a lasting connection between your brand and its users, while ensuring your program is up to date on all legal fronts. This can make navigating the ever-changing marketing landscape feel like a never-ending rollercoaster ride. But fear not!
In this exciting blog post, we're diving headfirst into the challenges faced by program managers in the mysterious realm of the 194R Section. And unlock strategies required to conquer these challenges with style and finesse. Let’s dive in!
1. Collecting KYC or other important customer data:
Challenge: Gathering valuable customer data while respecting privacy can be a daunting task.
Solution: The power of connection!
Imagine being a secret agent, collecting valuable intel while respecting people's privacy. Program managers, this is exactly what you do, as the 007 of customer data!
First, simplify the enrollment process to ensure quick and seamless onboarding for users. Next, encourage users to avail of program benefits for some time, fostering trust between them and your brand. Remember, you want to gradually gather valuable profile information as users engage over time.
And when you notice a user consistently redeeming benefits leading them to exceed 20k in a financial year, educate them about the194R experience while collecting essential KYC data!
These steps will create a seamless process, allowing your customers the time to trust you and making it easier for you to collect data!
2. TDS deductions and liability:
Challenge: Complexity and time required to adhere to 194R Requirements.
Solution: Educate, put up a process and automate!
Step 1: Unleashing the power of knowledge
Program Managers and finance teams need to begin by reading up on the government-issued Circular No. 12/2022
Step 2: The Art of Collaboration
Once the two parties have devoured the document, it's time to join forces and create a specialized format to make Tax Deducted at Source (TDS) deductions a breeze. This format is crucial for ensuring accurate calculations and seamless deductions. Don't forget to share this golden format with your tech-savvy counterparts, bridging the gap between the teams.
Step 3: Embracing the tech revolution
Armed with the format bestowed by the finance team, it's time to revolutionize the TDS deduction process. Say goodbye to manual labour and hello to automation. By automating the entire process, you'll eliminate errors and streamline efficiency!
3. TDS rate:
Challenge: Unravelling the intricacies of 194R's impact on your industry, category, and Loyalty Program genre
Solution: Reach out to the experts!
Knowledge is power. Begin by understanding the rules of the game, as TDS rates can vary based on program type, participant category, and payment amounts.
Here’s the basic threshold you must be informed about: TDS is applied when the payout you are making to your user, whether in cash or kind, surpasses 20,000 in an FY. For this 20,000, a 10% deduction has to be applied if a Pan Card is provided, and if not, 20% has to be reduced!
We recommend diving deeper and connecting with your company's accounting guru for more clarity and answers.
4. Managing program participants' expectations:
Challenge: Educating the participant and managing their expectations
Solution: Meet your Target Group where it is!
Step 1: Know your audience
Communication is easier when your users are white-collared. Your approach must change if your users are grey-collar entrepreneurs like electricians, plumbers, carpenters, and mechanics. Understanding their vocational training, educational background and practical knowledge is a must.
Step 2: Speak their language
Be clear and concise, avoiding technical jargon. Connect with their practical expertise and keep them engaged.
Step 3: Utilize all channels to communicate
Combine offline (sales team, field visits, messages, informal meetups) and online (chats, apps, messages) methods. Mix it up with videos, infographics, graphics, images, calls, automated messages, and contact calls.
Step 4: Adapt and evolve
Listen to feedback, adjust your approach, and stay open to new ideas. Continuously enhance their experience.
By managing expectations effectively, you build stronger relationships, and boost loyalty! Remember, happy users = a successful program!
5. Impact on program cost & budgeting:
Challenge: Balancing program costs and budgeting effectively.
Solution: Walk the tightrope!
When it comes to TDS deduction, you have two options that we can think of: deduct from the payout or internalize the cost. But how do you make the right decision? Consider these three factors:
1. Know your target audience: Understand how they would react to each approach. Their preferences and expectations should guide your decision-making process.
2. Measure the impact on ROI: Assess how each option will affect your program’s (ROI) return on investment. Find the balance between tax deductions and financial outcomes.
3. Keep an eye on competitors: Stay informed about what your competitors are doing. Evaluate their strategies and ensure you remain competitive in the market!
6.Audit and documentation:
Challenge: Ensuring meticulous audit and documentation practices.
Solution: Leave no trace!
Establish robust processes and embrace digital tools. Create foolproof systems for recording transactions, TDS deductions, participant details, and program-related communications. Leverage advanced tools to streamline documentation and minimize the chance of errors or oversights. By maintaining immaculate records, you can confidently handle audits and legal inquiries, ensuring compliance and peace of mind.
Conclusion:
To sum it up, program managers in loyalty programs face diverse challenges, ranging from data collection and tax regulations to user expectations and financial management. However, these challenges can be overcome with the right strategies and solutions. As explained above, by embracing the practice of transparency, seeking expert guidance, maintaining thorough practices, etc., program managers can navigate these obstacles successfully!
Additionally, identifying a loyalty program partner who gives you the loyalty product and helps you run it will significantly contribute to your program's success. Selecting a partner who specializes in Loyalty, is up to date on what's happening, and is quick to tweak their platform to meet the needs of the time is the kind of partner you need.
Remember, every challenge presents an opportunity for growth and the chance to create unforgettable experiences that strengthen brand loyalty. Rise to the occasion and unleash the full potential of your loyalty program!