Understanding Why Your Customer Loyalty Program Isn’t Showing Results

Customer loyalty programs are a great way for companies to build long-lasting relationships with their customers and reward them for being repeat buyers of their products. After developing a loyalty program for customers the last thing brands want to see is a lack of results.

Loyalty programs need to be performing well across key areas to ensure the program is mutually successful for your company and your consumers.

To avoid negative outcomes, here are 6 potential issues to be aware of that could be impacting your program results.

1. Loyalty program rewards aren’t appealing or realistically attainable to the customers 

Providing customers with reward incentives as motivation to buy from your company is a key aspect of customer loyalty programs. For these rewards and incentives to be effective, you want them to be both A) worth working towards and B) possible to attain.

Incentive and reward programs work best by providing customers with a strong mix of "soft wins" and high-value yet achievable rewards. These rewards, incentives, and perks work even better when made available in a tiered loyalty program format where customers can earn incrementally higher-value rewards as they progress upward. This reserves your higher-value rewards for the top tier levels and your VIP customers. 

If the only valuable or worthwhile rewards cost an insanely high amount of points, then that is going to discourage a large majority of your customers from participating. They won't feel the time, energy, and money required to earn those rewards is worthwhile to them.

It is also important to make sure that the rewards you are offering are relevant to your entire customer base. If your rewards catalog only targets one specific type of buyer persona, then you risk excluding all of your other types of equally valuable customers. 

2. Customer data isn’t being used productively OR you aren’t optimizing customer data

Loyalty programs are a stellar source of first-party data when set up properly. However, there is no point in collecting your customers' data if you are not going to put it to good use!

If you identify key purchase behaviors such as what your customers are buying, the product categories they frequent, or how often they are making purchases, then you could break them into segments to easily target them with different marketing offers specific to their buying preferences.

If you let your loyalty program data go to waste then customers may be receiving irrelevant marketing communications that have nothing to do with their interests or their preferred products from your company. 

3. Your loyalty program is seen as just “earn and burn”  

Your loyalty program needs to be seen as more than an "earn and burn" program. You want to build a long-lasting relationship with your customers and make them want to stay in touch and in business with you. If your loyalty program doesn't take steps to establish that relationship it is more likely customers will make one big purchase, redeem their rewards, and then never come back to your company.

This is why it's important for loyalty programs to utilize retention tactics that focus on establishing a connection with the customer and continuing to build the relationship outside of monetary transactions. 

4. Your loyalty program isn't staying current and up-to-date

Loyalty programs are not meant to follow a "set it and forget it" game plan. Top-performing loyalty programs are routinely optimized to better serve the evolving wants and needs of their customers. Ideas such as incorporating gamification elements into how members earn points, upgrading technology to make it faster and easier for members to redeem, and even enhancing the rewards catalog with fresh and modern rewards can boost program performance.

No one wants to continue spending money with a company's loyalty program only to find that the rewards haven't changed in years. You must keep your program up-to-date and exciting to ensure that customers continue to feel motivated to keep returning and spending money to earn rewards. 

5. The loyalty program's user interface is not user-friendly

Customers do not want to jump through hurdles to understand how a loyalty program works and what they need to do to get their rewards and offers. Tedious enrollment processes, difficult earning rules, or overly complicated redemption requirements can deter all but the most devoted customers from participating in your program.

You want your loyalty program experience to be smooth, and functional, and utilize features that help, not hinder customers from participating. Keeping things simple will allow customers to easily understand how they can utilize your program and whether your program is a good fit for their needs.

While simplicity is important, make sure that your platform still provides all of the information that it needs to get a good image for your company. 

6. Consumers don’t fully grasp the value your loyalty program provides 

A core function of a successful loyalty program is to provide value for its members. Whether that's through hard or soft benefits, partner offers or rewards, member content, and engagement, the goal is always to ensure your customers find value in your program and brand.

If the customer doesn’t have a clear understanding about what value your program offers then they are less likely to utilize it. For new users, your program value should be very simple for them to understand so they can see why it would be beneficial for them to join. For existing members, you should regularly promote and encourage members to explore unused benefits to ensure they are getting the maximum use and value out of your program. 

These are 6 things to look out for when your customer loyalty program isn’t showing the results that you would like to see. It is important to remember that it could be a simple fix that makes a large difference when it comes to the results. If you have a clear understanding of what the problem is then you can work on the solution.

Looking for a loyalty partner to help turn your program around? Reach out to us and we can help!