7 reasons for a loyalty program to fail

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Customer loyalty and rewards programs aim to boost customer engagement, enhance customer experience, drive repeat purchases and maximize ROI. However, many brands today face difficulties reaching these targets and the performance of their customer loyalty program is low.

There are probably many reasons why your loyalty program is ineffective. Find below 7 of them and smart ways to overcome all challenges.

Reasons that your customer loyalty program has a poor performance are because it:

1. isn’t based on a solid customer loyalty strategy

Loyalty strategy enables you to set goals and describe with clarity and detail its specifications, requirements and processes. By not having clear goals, you can’t understand what works and what doesn’t.

How to overcome this challenge: Define your loyalty goals, evolve your approach by focusing on the customer relationship, customer engagement, and advocacy.

2. mainly focuses on the “buy” stage of the customer journey

Loyalty today has become synonymous with points and discounts and less with the customer’s emotional connection to the brand. This limits the customer relationship to the number of purchases.

How to overcome this challenge: If you want to build trust, address the emotional complications of customer loyalty and reward customers for a variety of different actions.

3. isn’t designed with mobile in mind

In today’s unified commerce, if you are not thinking mobile-first, you’d probably not reaching a great number of your target audience. Mobile is a channel that transforms the entire customer experience and enables you to become more customer-centric.

How to overcome this challenge: Start thinking mobile-first strategies and consider investing in a mobile loyalty application for your rewards program, where all members can easily enroll in it.

4. isn’t promoted effectively

How will your customers know about your loyalty program if you don’t promote it? Especially in e-commerce, help visitors get to know the program and stay in touch with existing members to communicate them the latest updates of the program.

How to overcome this challenge: Build a loyalty marketing plan in order to effectively communicate it and boost customer enrollment, both online and offline.

5. doesn’t involve all departments of your organization

Most businesses believe that customer loyalty programs are the sole responsibility of marketing.

How to overcome this challenge: Don’t isolate loyalty. The customer service and customer experience department along with the business technology and market research teams should and must involve in driving customer loyalty.

6. doesn’t use properly all data and insights

According to Forrester, only 7% of marketing executives mention customer data collection as a top-three business objective for their customer loyalty strategies. If you don’t understand your customers, you’ll not be able to deliver the right experience to them.

How to overcome this challenge: Start with analyzing their shopping behaviors during the customer journey across all channels. Through your loyalty program, you can gain valuable insights. Use them for deeper customer understanding and refine your strategy.

7. is too complex

Convenience is key for the Connected customer. An effective customer loyalty program should offer consumers increased choice, convenience, and control while still being easy to operate.

How to overcome this challenge: If you want to differentiate from competitors, use technology to connect in real–time with your target audience. Invest in a technology solution that enables highly personalized automated campaigns. Both you and the customer will gain valuable time.

Loyalty isn’t a one-time investment. It is a long-term process that requires time, strategy and continuous optimization. A loyalty program is a very powerful tool that helps you create seamless customer experiences and step ahead of the competition.

If you want to learn more about improving the performance of your loyalty program or building a new one, visit our website or contact our loyalty experts.

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