The benefits of customer loyalty programmes are plain for everyone to see. Any company looking to reduce retention and acquisition churn rates should certainly get their foot in the door here, especially considering that 95% of companies report loyalty members spend more annually.
Sadly, despite these obvious plus points, loyalty can be a white whale for many businesses. Worse, with 6 in 10 UK customers now expecting programmes like these as standard, a failure to get on top can lead to stalling company efforts and growth goals that forever remain out of reach.
This is a significant setback, especially if you’ve put ample planning and effort into loyalty programmes you were sure would hit the mark. Realistically though, loyalty is a sensitive matter, and there’s a wide range of reasons your efforts may be stalling right now. Here, we are going to run down the most common causes for failing customer loyalty programmes, and what you can do to overcome each.
# 1 – You aren’t surprising customers
Too often, companies rush their loyalty efforts with standardised programmes such as purchase-led points systems, and discounts on future purchases. Undeniably, these are go-to’s because they work, but a complete failure to surprise customers could still see these focuses letting you down. That couldn’t be further from the increased customer numbers you’re hoping to achieve, nor will it do anything to impress, especially when other companies are working hard on getting creative.
Take, for instance, the best-loved loyalty programmes of the moment, such as the flexible point redemption offered by The North Face or the My Starbucks Reward app that’s turning loyalty cards on their heads.
Why are these methods proving so efficient? Because they offer the power of the unexpected, and everyone loves a surprise. By breaking the chains of loyalty programmes as customers know them and still offering relevant discounts, these brands show that they genuinely care about rewards with meaning, and that’s really what this loyalty effort is all about.
What to do:
Surprise should clearly play a role in your loyalty programme, but understanding how to implement this approach isn’t always easy. Just like The North Face and Starbucks, you ultimately need to find ways to mix things up or make your loyalty efforts stand apart. Some of the prime ways to do that include:
- Change offerings regularly
One set loyalty programme will never be enough to create competitive efforts, hence why you should change these offerings frequently. You want to keep each programme in place for long enough that consumers can make the most of those perks, of course, but not so long that they lose interest.
- Incorporate scarcity
Your loyalty scheme could also benefit from scarcity tactics, including diminishing or time-sensitive discounts. Unlike bland, open-ended offers, the mere urgency posed by a discount with an expiry date could surprise and encourage customers into return purchases at last.
- Let technology do the talking
As we can learn from Starbucks, bringing tech into the loyalty fold can take even standardised programmes up a gear or two by simply challenging the status quo. At the very least, mixing up that loyalty focus with app developments could see you reaching the 70% of consumers who prefer to access loyalty offerings through mobile right now.
- Expand beyond your brand
Why not add surprise by thinking outside of your brand box? By partnering with a relevant third-party for loyalty offerings outside of your product range, you could surprise consumers better than ever, as well as potentially opening yourself to a brand new audience if the company in question does the same.
# 2 – It’s too hard to claim offers and rewards
Friction is the enemy in the modern economy, and it’ll spell the end of your loyalty efforts if you let it. In fact, this setback alone could mean risking rather than retaining as many as 78% of your loyalty members.
Sadly, friction can muscle into loyalty programmes in a few ways, including deception or long-winded expectations. You might think your programme is the bee’s knees because you can offer eye-catching entry into a ‘free round-world trip’ draw, for instance, but customers are never going to appreciate this effort if they have to make certain purchases or complete endless forms before they’re eligible. This is especially the case if such stipulations aren’t made clear from the start.
Ultimately, loyalty programmes like these are impossible to engage with, and engagement is exactly what you’re aiming for. As you’ll soon find out, though, this goal is impossible until you consider systems with the best UX and approaches for every single loyalty undertaking.
What to do:
Transparency and ease should both get a significant look into your loyalty programme focuses, and some of the best ways to guarantee that include:
- Think long-term
Don’t just offer the most spectacular loyalty programme you can think of for immediate wow-factor. Instead, remember to consider retention, which is most often achieved with straightforward and upfront loyalty efforts that impress in the long-term, rather than wowing in the now.
- Put yourself in the customer’s shoes
Think about how you’d feel as a customer if approached with the loyalty offerings you’ve currently got on the table. If the hidden requirements would be enough to put you off pursuing the programme, then the chances are other people will feel the same way.
- Always simplify
Ultimately, you need to make sure your loyalty programmes are simplistic, both in their implementation and the benefits they bring. On a basic level, this means making sure customers don’t have to fill forms, buy certain products, or bend over backwards in any way. Taking this even further, your loyalty simplification should follow in the shoes of brands like Nike, who ensure omnichannel approaches with everything from discounts to rewards programmes for exploration and redemption that’s easier than ever.
# 3 – You don’t have visibility over what works or the courage to experiment
Visibility over customer data is everything where loyalty efforts are concerned. Not only will this help you to determine when loyalty focuses are appropriate, but it will also allow you to form future efforts based on what you can see has or hasn’t worked in the past.
Without this visibility, experimentation and loyalty success is likely to remain far from reach despite your best efforts. Instead, you’ll either slip into the one-track loyalty approach we discussed in the first point, or you’ll fall into the trap of continually changing your programmes with no real backing or evidence for doing so.
Either of these mistakes could see your efforts floundering, founded as they are on an absolute lack of consumer feedback. That’s hardly ideal considering that loyalty is all about giving customers more of what they want, and it’s a setback you can only overcome by improving visibility on a programme-wide scale.
What to do:
Visibility around even large amounts of customer data is evidently non-negotiable. If you’ve never considered this need in the past, though, you may be at a loss as to how you can improve your view on the average 1.7 megabytes of data each customer creates per second. Lucky for you, this seemingly complex process is perhaps the easiest to get your head around in the current loyalty climate. All you need to do to open your eyes here at last is:
- Implement analytics capabilities
We’re in a privileged age where even wide-scale analytics capabilities couldn’t be easier, and it’s all thanks to the technologically enabled systems on offer across the board. By implementing either a loyalty-based app or digital programme, you can open yourself to analytics capabilities that not only understand where loyal/repeat customers are coming from, but also help you to track your loyalty efforts as they stand. It’s astounding stuff, and the tech on offer means that you needn’t even add to your workloads to make it possible.
- Use metrics as market research
Once you’re better able to collect and oversee information in this way, you could also benefit from using metrics as a form of market research to shape future loyalty efforts. Tracking your most successful campaigns can work wonders for this, as can overseeing personalised shopping habits for tailored loyalty offers that improve customer lifetime value (CLV) better than ever before.
Customer loyalty success is about adding value to your customer
If you’re not putting much thought into your loyalty offerings right now, then it’s little surprise your efforts here have an annoying habit of failing. Ultimately, your success in this area comes down to your ability to add value to new and existing customers, either through unique approaches, simplified loyalty offerings, or data-led programme decisions. These are each relatively basic focuses that you’re already likely implementing elsewhere. Now, all you need to do is approach with loyalty in mind, and start enjoying results here at last.
If you want to be even more sure that your loyalty programme will lead to happy customers, outsourcing to specialists to help to create your loyalty programme can help with this. With the right partners and technical expertise, they can help get your programme up and running smoothly, ensuring you get the results you want without worry of failure.