Last Updated: February 2024
To retain your customers, you have to think long term. This means thinking not only in terms of sales but also building relationships with them. If your customers feel valued and appreciated, you can generate priceless word-of-mouth publicity. In turn, this stimulates referrals, positive online reviews and lowers marketing costs. This is a key reason why businesses invest in loyalty programs.
Research shows that customers joining a loyalty program are more likely to spend more and continue buying from a brand. No business would want to let go of such an opportunity. Depending on the niche you’re in, you can implement a variety of loyalty programs in a way that drives your top business KPIs. The problem is that loyalty programs are not always successful.
Why Do Loyalty Programs Fail?
Though it may generate higher engagement for a while, as customer interest wanes, a loyalty program might soon start underperforming. In some instances, it may become unsustainable to continue with a loyalty program if your margins are too low. There are many reasons why loyalty programs fail. According to the COLLOQUY Loyalty Census, 54% of customers become inactive after getting on a loyalty program.
The data proved that customers become disengaged if it takes too long for them to earn points or if the rewards themselves were irrelevant. It also reported that customers lost interest if they were sent too many communications relating to a program. At the same time, customers were 53% more likely to engage with a loyalty program that was easy to use. Easy-to-understand terms and conditions were also a top factor for loyalty progress to succeed.
A loyalty program can only be as successful as the customer experience it creates. That means on-going personalization. Secondly, it needs to add value across the customer journey, or it is likely to be forgotten.
Ask yourself: Does your program really stand out from those of other brands?
Are you leveraging customer data to identify possible reasons for an inadequate customer response? How do customers perceive your program- Are the rules easy to follow? Do you offer different choices in terms of rewards and benefits?
5 Proven Strategies to Make Your Customer Loyalty Programs Work
If you have been looking for ways to revive a failed loyalty program, here are some proven strategies you can implement right away:
1. Quality rewards that matter to customers:
Customer preferences tend to change over a period of time. If you offer the same rewards options year after year, there is little incentive for customers to keep buying. This is because customers constantly compare the cost of purchase to the value they ultimately get. This is where ecommerce brands need to leverage customer feedback to create interesting, new rewards.
Thankfully, there is plenty of customer data available through online activity analysis, NPS, and CSAT surveys for this purpose. Since there is a cost associated with every gift or coupon you give away, it is vital to know, from a business perspective, whether the ROI is worth it.
2. Easy to redeem points for discounts and offers:
Online shoppers have little patience for loyalty programs with complex rules and limits. For example, if points can only be redeemed for select products, many customers might opt-out of the program altogether. To counter this problem, give customers the freedom to redeem points against any product you have to offer.
Secondly, most online shoppers have multiple loyalty program membership cards. That is to say, they aren’t exactly convenient to carry around. Some brands have started to adopt mobile vouchers and virtual loyalty cards for this reason, and the results have been exceptionally good. For example, Starbucks reported higher engagement after it introduced the Starbucks app and digitized the redemption process.
3. Visibility and Clear CTA:
Studies show that the average attention span has declined from 12 seconds in the last decade to just 8 seconds today. This represents a challenge for brands in terms of loyalty program conversion and engagement. Here’s a solution: to attract shoppers’ attention, integrate a loyalty widget on to your home page, and add a dedicated tab to your website’s main navigation menu.
More often than not, customers also tend to get confused with reward tiers, redemption rules, and exclusions. So, a clear CTA and simple instructions are essential to encourage customers to sign up for your program. Use attractive images and compelling copy with a clear intent to “sell the benefits”. Add them to not just your landing pages, emailers, and social media campaigns but also to customer log-in pages. This can drive up redemptions and boost average order size.
4. Loyalty partners
Limited redemption options are a key reason why ecommerce loyalty programs fail. To provide a better experience, e-commerce brands need to think beyond their products. Diversifying rewards through strategic partnerships with off-line and on-line merchants can be an ideal solution to boost falling sign-ups.
For example, allowing redemption at gas stations, pharmacies, hotels, and cinema halls or converting points into cash can provide your customers with greater value. Integrating offline and online program partners can also help you tap new audiences and share the costs of managing the program.
5. Reward social media activity
Social proof is the best way to create interest in an underperforming loyalty program. Not everybody can afford a celebrity endorsement, but you can leverage the social media activity of some of your best customers to encourage others to try it. Reward positive reviews and comments with bonus points and exclusive offers. This will stimulate conversations about your loyalty program and increase conversion.
As customers get curious about your loyalty program, they could reach out to your customer support helpdesk for help. Customer support agents can also serve as an ideal channel to up-sell your loyalty program to your customers. Without 24X7 support, you could be losing out on conversion opportunities and repeat sales. Extended coverage does have its costs; however, Saufter can help you bridge the gap with its flexible and affordable plans.
Our team of skilled customer support experts can boost conversion and engagement for your brand. What’s more, there are no long-term contracts to worry about. Also, try Saufter – the customer service software that can help you automate and scale your customer support.