Do you know more than 70% of customers prefer to join a loyalty program that does not require a physical card?
Loyalty programs are designed to attract brand loyal customers to make frequent purchases. These days, most of the businesses are using some types of rewards to retain their loyal customers. They are offering rewards like special discounts, points, coupons, etc. to allure customers’ participation in the programs.
However, businesses make mistakes while building customer loyalty programs. Consequently, the program fails to attain the defined objectives. So, it is essential to understand common pitfalls that endures in the way of a successful loyalty program.
Let’s look at the mistakes businesses make while creating the rewards program, and how to avoid those.
Complicated Loyalty Programs
It is one of the prime causes that makes your loyalty program a failure. Usually, customers get away from purchasing a product or service if your loyalty program is complicated to comprehend.
When your users have to navigate through multiple levels of your website or fill out a long-haul survey, they easily abandon the business. In this case, it is more likely they turn towards your competitors. Also, if your loyalty program is uneasy to understand and participate, customers won’t prefer spending time to comprehend the process; they simply decide to do business somewhere else.
Tip: When you launch a loyalty program do not forget to offer a comprehensive guide to your loyalty programs. Plus, try to make it simple so that your potential customers can participate flawlessly.
Not Treating High-value Customers Differently
It is a fact that you should handle every customer with equal respect. However, you need to give special consideration to your topmost loyal customers. As they are likely to make more frequent purchases, you should reward them differently than ordinary customers. Often, businesses forget treating the brand loyal customers uniquely. As a result, they do not persuade expected business via loyalty programs.
Tip: Identify the more loyal customers to your brand than the others. Present them with special rewards and entice them to engage more with your products and services. You can also differentiate them via membership options.
Poor Promotional Activities
It is also one of the most common causes of the failure of a loyalty program. If you are launching the program, all your customers should be aware of the same. The lack of awareness of a rewards scheme causes major damage to a business.
Sometimes, companies use one or a few marketing channels to promote the program. Hence, only a small sum of customers gets knowledge about the offers. So, make sure you run the campaign to publicize your loyalty program by utilizing all marketing channels like emails, social media, direct mail, etc.
Tip: run more than one shot of the promotional campaign to entice customer participation.
It is imperative to understand customer data while implementing a loyalty program for your business. The number of current customers and how many times they are purchasing with you will allow you to gauze the profit.
In addition, retrieving your program’s data allows you to test and optimize your incentive strategy. With the data, you can experiment with variables like reward value, email copy, etc. When you do not focus on such statistics, your loyalty program may not succeed.
Tip: Gather as much data as possible to execute the right loyalty program at the right time for the right customers.
Failed To Deliver Proposed Promises
The gap between customer expectations and reality causes loyalty programs to fail. Many times, companies promise many benefits to them. But, in reality, customers are getting absolutely few due to various reasons.
The dissatisfaction from not receiving all benefits, customers turn away and may spread negative word of mouth. To overcome this problem, organize a cross-functional workshop and align all your staff. This practice will inform your employees about making the right promise to your audience.
Tip: only promise such benefits that customers are actually going to get. Value their rewards and present it humbly to all your customers.
Not Understanding Customers Behavior
Last but not least, once you understand your customers better, you can master your customer loyalty program. Oftentimes, businesses ignore customer purchase patterns and behaviour. As a result, they are unable to execute the right rewards for their customers. The more you understand your audience, the more you can personalize the services. In fact, according to one study, more than 90% of businesses experienced higher profitability who have offered advanced personalized services to their customers.
Tip: Use social media to know your customers’ behaviour. Also, identify their purchase habits to offer them customized rewards.
Thus, understanding your audience, use the right promotional channels, deliver the values, and use the analytics to launch the right loyalty program for your customers. Moreover, design simple and intuitive loyalty programs along with appropriate guidelines. These practices will help you launch successful rewards schemes. Focus on the above mentioned most common mistakes business make and avoid them while you are introducing a loyalty program for your customers.
About The Author:
David Milsont is a digital marketeer. His focuses are digital marketing, loyalty programs, social media, eCommerce and latest trends.