Loyalty programs have become a good way for companies to cultivate relationships with their consumers as well as to encourage brand loyalty and customer interaction. Unfortunately, not all loyalty programs are made equal, and some will even fail. Just as a strong loyalty program can bring plenty of benefits, a poorly designed or poorly executed loyalty program can hurt your company. To ensure that your company benefits, make sure that you are avoiding these common loyalty program platform mistakes.
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Confusing Rules and Complex Point Systems
The most common problem seen in a failing loyalty program platform is that it is too complex. One example is a loyalty program implemented by Chipotle that consists of complex tier-like layers that reset every three months. The program’s structure and points system are too complex for consumers to grasp which means that most consumers are likely to give up altogether.
While a dynamic loyalty program is key to garnering consumer interest, the rules and the point system should be intuitive and easy to understand. To avoid complex math, for instance, you can use multiples of 10 for every purchase with 10 points for a purchase and 50 points for a larger loyalty action.
Failing to Welcome New Members
With new customers, you have a unique opportunity to make a positive first impression that will prompt a one-time consumer to become a loyal customer. However, new customers that do not feel welcome or appreciated will simply stop interacting with your brand.
At the very least, you should be sending all of your consumers a welcome email. A better alternative, however, is to offer sign-up rewards such as gifts, points or discounts. Not only will the initial gift make new customers feel welcome, but it will also entice more new consumers to sign up as part of your loyalty program.
Relying on Plastic
In an age of digital wallets, insisting that your loyalty members carry plastic identification cards is pretty ridiculous. Plastic cards can cost your company up to $1 per card and will often be lost or forgotten by users. Meanwhile, plastic cards are also useless for e-commerce transactions.
Instead of plastic cards, it is more prudent to track consumers via an omni-compatible feature such as an email address. The email address will allow your consumers to be recognized both in-store and online, and your customers will have one less thing to remember.
Not Rewarding Your High-Value Customers
While it is important to show equal respect to all of your customers, treating all of your customers equally is not recommended. If you treat your high paying customers or your advocates the same way that you would treat your newest customers, your loyal customers and advocates will quickly start to feel underappreciated.
To avoid this error, you can create tiers in your loyalty rewards membership and offer special perks to higher tier customers. You can also recognize your brand’s advocates by offering points for social engagement.
Narrowing the Rewards Period
Points systems that ‘renew’ too quickly can feel like a waste of time to consumers. If your customers don’t have a reasonable time to earn points, they will not be rewarded for their loyalty and will become disillusioned with your brand. Take, for instance, JetBlue’s TrueBlue program, which had a one-year renewal period for its points. The unreasonable timeframe left many customers with lost points. Naturally, consumers were unhappy with JetBlue which led to changes in the TrueBlue time limit.
Make sure that your loyalty renewal time frame gives your customers plenty of time to accumulate and redeem points.
Failing to Measure Efficacy
Loyalty platforms provide a variety of data about the program including member-site interaction, consumer sign up rates and consumer returns. This data can be used to help optimize your loyalty rewards program. Programs that fail are often not paying attention to the warning signs that could have easily been spotted in their loyalty program metrics.
Poor User Experience
Loyalty programs that create too many logins or authentication patterns for their users will be quickly abandoned by consumers and will significantly impede the productivity.
Your loyalty platform should allow for easy login and points redemption. Because most modern consumers tend to use their phones as part of their shopping experience, your program should also be compatible with mobile devices.
Companies that only reward for purchases are missing out on the opportunity for consumer interaction and consumer advocacy. Instead of limiting rewards points to sales, you should also consider rewarding customers for advocacy actions, engagement behaviors, and friend referrals.
Not Marketing to Your Audience
Modern consumers want a personalized experience from their brands. Companies that mass market their loyalty programs may end up offering rewards that are simply undesirable and will fail to create an emotional connection with their consumers
To avoid offering worthless rewards, utilize your consumer data as well as consumer demographic to identify the incentives that are most appealing to your customers.
Avoiding these nine mistakes will help you optimize your loyalty program and lead to customer retention success.