7 Common Mistakes Leading to Creation of Unsuccessful Loyalty Programs

by Deepak Nautiyal |

7 Common Mistakes Leading to Creation of Unsuccessful Loyalty Programs

Despite having the best strategic planning in place, when your customer loyalty program does not produce the expected results in terms of revenue growth and profitability, it is bound to be tagged as a failure. Unsuccessful loyalty programs indeed take a toll on all the hard work and pain you had dedicated in launching the rewards loyalty program over a span of time.

Dealing with such ineffective loyalty programs can be a major challenge for brands; however, having a systematic strategy in place and avoiding the typical pitfalls in loyalty program implementation can definitely help you in this regard.

What Makes Unsuccessful Loyalty Programs a Hit to your Customer Retention Capabilities?

One of the prominent marketing strategies, loyalty programs help brands retain loyal customers with added assurance of increased revenue & profitability. While the most successful loyalty programs aim at motivating customers to make frequent purchases, the unsuccessful ones revolve around complexity, lack of clarity, and confusion for the customer.

Basically, unsuccessful loyalty programs severely impact your customer retention capabilities by letting loose the existing grip you have on customers. Firstly, you didn’t take the customer’s perspective into consideration while designing your fancy customer loyalty program and further loaded it with abundant complexity for the customer to stay in a dilemma.

What can you expect from such a program? It’s definitely designed to fail. The worst part again is the negative influence it has on the customer which may even drive them away permanently from your brand.

Why Loyalty Programs Fail? ­Typical Mistakes to Avoid

A loyalty program not implemented using the correct strategy is most likely to fail. Moreover, there are several other reasons for loyalty programs failure. Let’s get acquainted with the typical mistakes that lead to ineffective loyalty programs and the solutions to avoid them-

1. Keeping Joining Process Complicated

Customers are looking for shopping solutions competent to delivering value easily & quickly. When it comes to creating an account for enrolling in the loyalty program, the expectation is similar. However, when they have to fill extensive forms for same after navigating multiple pages, the willingness to become a part of the loyalty program fades away for most customers. In fact, 70% of your customers may refrain from signing up for the program if enrolling is a complicated process.

Solution – Simplifying the signup process is the optimal way to avoid such a glitch. Keeping the registration form uncomplicated and short will definitely help.

2. Program Features Too Confusing

Overloading your loyalty program with sophisticated features and conditions is again a big turn off for your customer. You may consider the included features as an attractive element for enticing the customers; however, same may be confusing from the customer’s perspective, thereby repelling them away from the program.

Solution – Having a comprehensive page explaining all the program features in a straightforward tone would definitely help the customer get a better understanding of your program.

3. Lack of Original Brand Experience

It is indeed one of the biggest challenges of loyalty programs implementation. Modern customers are naturally attracted to the finest of aesthetics when it comes to digital experiences. So, presenting your customers with poor program design, a mediocre program name and a program layout that appears disconnected from your original brand identity would naturally turn them away.

Solution – Make your program design more appealing for customers by using your brand logo, customized text and catchy colors that resonate with your original brand.

4. Changing the Program Rules Frequently

Making frequent changes to your rewards program rules is one of the most severe pitfall that must be avoided at all costs. Bombarding your customers with updates on the changes you made to the loyalty program rules may require them to revisit the entire program again in case they have the slightest of doubt. Such timely instability from your end may bring a timeout for your loyalty program too and should be avoided at all costs.

Solution – Ensuring clear communication with customers explaining the changes made to the program will help the customers understand them better. Moreover, customers will feel valued at the same time on receiving your brand communication.

5. Reward System Boring

Same type of rewards may not work for all customers as all customers are not created equal. Discount coupons, for example, may not be the reward preference for all customers alike. If you are offering simply one type of reward constantly, your program members may lose interest gradually.

Solution – Diversifying the rewards offered to customers is the ideal approach to take. Rather consider pooling together transactional rewards with experiential rewards to present a more enticing offer to your customers.

6. Letting the Dormant Customers Sleep

A large number of your customers may enroll for your loyalty program but then forget that they enrolled. They may have enrolled in the program out of their love for your brand or may be due to the exceptional program features as offered under the program. However, not being an active member is almost like not being a part of the program.

Solution – Ensure to keep all enrolled customers engaged and reminded by sending them behavioral marketing emails on a timely basis.

7. Earning Rewards is Tedious

Making the loyalty program reward structure too rigid may lead to customers finding it cumbersome to earn rewards. This would simply turn them away to some of your other competitors as customers never prefer struggling to earn rewards. It’s moreover your faulty program design that brings out such a situation.

Solution – Keep it easy for the customers to earn rewards but give out only those which have the potential to influence loyal customers and can be afforded easily without giving away too much from the business perspective.

7 Best Tips for Running a Successful Loyalty Program

Let’s quickly sum up the takeaways from the above pointers to derive tips for efficiently running a successful loyalty program –

  1. Keep your loyalty program signup process straightforward to allow quick signup
  2. Provide detailed, clear & understandable information about your program features
  3. Invest effort to make your program theme appealing and in sync with your brand
  4. Make changes in program less frequently and communicate same clearly
  5. Provide a more diversified reward scheme to keep customers amply enticed
  6. Send reminder mails to engage customers, especially to those enrolled yet inactive
  7. Make rewards earning easy for customers without compromising on profitability

You can definitely shrink the chances of failure of your loyalty program to zero besides meeting the common challenges of loyalty program implementation with ease simply by following the tips mentioned above. Also, you must ensure to promote your loyalty program correctly as poor promotion could be another valid reason for your it’s failure.

Design your Loyalty Program from the Customer’s Perspective to Deliver an Enriching Experience

Hopefully, avoiding the mistakes mentioned above will help you transform your unsuccessful loyalty program into a successfully running one. Ensuring to provide the best customer experience holds the key to running a successful loyalty program and hence you can weave your loyalty program launch strategy predominantly around it.

If you want to know more about how to create a successfully running customer loyalty program to boost customer retention and amplify revenue, our experts can be definitely of some valued assistance to you. Feel free to connect to our experts.

[White Paper]
[White Paper]