Customers Want More than Copper Tokens. Are You Prepared?

May 22, 2018

By Jack Cooney | Marketing

Companies have been implementing customer loyalty programs to help increase customer retention and acquire new clients for centuries. In the 1700’s, American retailers gave out copper tokens with purchases that could be used as store credit in the future.

Today, loyalty programs are still a valued means for marketers to retain and energize their customer base, helping to boost profits by over 25% from just a 5% retention bump. As exciting as that it, the all too familiar reality is that far too many loyalty programs are stagnant or in decline and while signing up new members is beyond easy, over 50% of memberships are inactive.

If you’re in the not satisfied camp with your current program performance, here are 3 common mistakes you might need to fix to get your loyalty goals back on track.

1) No Personalization

Generic messaging routinely leads to an abundance of non-relevant communications that can quickly make customers indifferent, and worse, unlikely to take immediate action. As a general rule, appealing to a general audience is the fast track to gutting your loyalty efforts. Instead, loyalty marketers should focus on personalization, especially for high-value members and next-best customers.

Personalizing promotions to individuals based on actual interests and behavior is nothing new and yet most organizations still fall short to properly engage their best customers. To make matters worse, the same folks fail to take steps to understand the types of customers that make up their base, effectively preventing them from allocating rewards and offers to their VIP loyalty members and the next best tier, those with the greatest potential for increased spend and ROI.

It doesn’t take much to implement an effective personalization strategy that starts generating immediate results. Start with an Opportunity Analysis to solidify what you think you know about your customers and enable the data to direct communications for desired outcomes and better overall program performance.

2) Never Showing Appreciation

Great loyalty programs not only strengthen a customer’s relationship with a brand, but also provide a means to bank goodwill that will offset the inevitable negative experiences that sour customers and hurt sales. We’ve talked previously about how easy it is to incorporate appreciation into loyalty programs and in such a way that it enhances the customer experience. Appreciation can be conveyed in limitless ways:

  • Simple thank you for being a member
  • Limited announcements to only the best customers for special events or no promotions
  • Unexpected “surprise & delight” gift

These efforts can go a long way to making customers feel special. They also have the upside of not being easily replicated by your competitors.

3) Way Too Complicated

Loyalty programs should always be simple. Simple to sign up. Simple to understand. Simple to earn and redeem.

Many loyalty programs have complicated rules, puzzling point conversions, or are structured in such a way as to disenfranchise members from even participating (e.g. benefits aren’t realistically obtainable). A big part of the value of a good loyalty program is to keep the brand top of mind with the customer; complexity that turns off customer participation undermines that goal. If a loyalty member is surprised to have earned a reward, it’s probably indicative of a program failing to drive actual loyalty.

Make sure your loyalty members have a clear understanding of the program fundamentals, including how easy it is to track points and redeem rewards. It should start at the point of sign-up, with attention given to properly training sales associates so they operate effectively as brand ambassadors that can clearly convey how the program works, the benefits of participation, and obtain goals that resonate with customers.

If you’re settling for email collectors at check-out, be prepared for more disappointing results.

Want more tips on improving loyalty program performance?

Check out our guide, 5 Solutions for Improving Loyalty Program Performance.

 

About the Author

Jack Cooney
Marketing Manager

Jack is a sales and marketing professional with a passion for great customer experiences. When he’s not launching new campaigns or updating Salesforce, he enjoys writing, driving, and embarrassing his kids. He currently oversees all content marketing and demand generation responsibilities for 89 Degrees.