Every loyalty program will run into issues sooner or later. As much as we hope for a problem-free loyalty program, nothing can ever be 100% perfect all the time. However staying aware of the different types of loyalty program issues or problems you're likely to run into can help you either avoid experiencing them completely or enable you to quickly correct them before they grows into a major concern.
Whether you've already have a live program and are experiencing some stumbling blocks, or you're hoping to avoid complications for a new upcoming program, this blog will help lay out the common loyalty program issues after launch and how to fix them.
For any loyalty program to succeed it needs to have participating members. If your program is experiencing low enrollment numbers right from the start you’ll quickly run into issues.
Some of the causes of slow or lackluster enrollment numbers are:
1. Lack of Promotion
Brands need to actively market and promote their loyalty programs in order to generate awareness and interest among new and existing customers. If customers have no idea your program exists then they certainly cannot enroll.
2. Complicated Sign-Up Process
If you’re promoting your loyalty program but still seeing low enrollment numbers, you may need to take a look at your sign-up process. Potential members might be put off by:
- Outdated and inefficient enrollment methods, such as filling out a paper form at a register.
- Requiring too much personal information right at sign-up, making the process long and tedious
Unclear Or Lackluster Value Proposition
Loyalty programs without a clear value proposition or with low-quality, lackluster value offerings will begin to fall behind their competitors.
Some companies have the mindset that launching a basic loyalty program that provides rewards for purchases is enough. However evolving customer expectations means that audiences want more from the brands they frequent, including their loyalty programs.
Loyalty programs should consistently deliver value to members beyond "points for purchase". A loyalty program’s value proposition needs to include a mix of hard and soft benefits that provide both monetary and emotional value to members. Member-exclusive offers, brand partnerships, and free delivery or concierge services are all value-adds that drive member participation.
A clear and robust value proposition is also important for brand differentiation. Brands need to find ways to set their loyalty programs apart from their competitors. If customers fail to understand the value of a program or don’t find the benefits relevant, they’re less likely to join.
Low Engagement Rates
One common program issue after launch is initially high member engagement after sign-up, followed by a steep drop in member activity. While some programs attempt to make up for this drop by focusing heavily on enrollment efforts, this isn’t a sustainable solution long-term.
Low engagement rates among your program members could be due to a number of reasons:
1. Only Engagement Opportunity Is After A Purchase
If the only time program members engage with your program is after a purchase, then you’re missing out on valuable opportunities to build customer relationships. Your program should incorporate ways to continue engaging program members even when they’re not actively buying from you. Providing content or videos, gamification, promotions or contests are all ways to can keep members active and connected with your brand.
2. Program Costs Outweigh The Benefits
Customers have a finite amount of time, energy, and money. It can negatively impact your participation numbers if your program requires too much of either. Common issues are:
- Too Much Effort To Earn Points - your earning rules are too complicated or require a large amount of money to earn a worthwhile number of points
- Difficult Redemption Process - there are too many conditions or complicated steps to redeem a reward
Siloed Loyalty Program Experience
Customer experience is becoming a critical factor in how and when customers decide to make a purchase. If loyalty programs do not provide a great customer experience, members are more likely to abandon the program.
One of the top reasons loyalty programs fail is because they’re treated like independent initiatives separate from the strategic direction of the main organization. To succeed loyalty programs cannot exist in a silo on their own; they need to be integrated with the other departments such as sales, marketing, operations, IT, and more.
This is important because customers today expect more personalized interactions and omni-channel communications from the brands they support. The only way for an organization to ensure customers are receiving the best experience is to have an in-depth understanding of the buyer journey and how customers engage with the brand.
When customers join a loyalty program, they expect to be recognized across the brand. If a loyalty program isn’t connected to the entire organization, there is a higher risk of service issues that can negatively impact the customer’s relationship with the brand. Customer complaints take longer to resolve, or members receive disjointed, inconsistent messaging across brand channels.
No Plans For Post-Launch Enhancements or Improvements
Far too often loyalty programs are built to follow a “set it and forget it” course of action after launch. However a successful loyalty program needs to have a set strategic plan and benchmarks to measure in order to optimize future growth.
A big factor that negatively impacts loyalty programs after launch is not having plans in place to optimize, improve, or enhance the program. Successful loyalty programs are designed and built with clear goals in mind; milestones to meet, goals to achieve, KPIs and metrics to measure performance. Launching a loyalty program with only a vague idea of what the program should accomplish will almost certainly lead to failure.
Establishing the strategic goals and KPIs before launch is crucial for understanding how to monitor and measure program performance on an ongoing basis post-launch. This gives you the ability to identify and resolve program issues as they emerge, before they become larger problems. It also gives you a basic roadmap for making long-term program enhancements or optimizations that support your larger strategic plan to hit program goals.
Creating a plan to consistently monitor and improve your program post-launch is a vital part of good loyalty program design that helps set your program up for success from the very beginning and ensures program ROI down the road.
You can avoid loyalty program issues like the ones listed about by constantly staying aware of how your program is performing, and providing ongoing maintenance and optimization. If you're looking for help to turn your program around or have a performance issue that needs solving, we can help!