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How to improve your customer loyalty programme

5 reasons why your customer loyalty programme is failing & how to fix

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Since the 1980s, businesses have been harnessing the power of loyalty programmes and schemes in order to develop customer loyalty.  In 2019, over 77% of British adults are members of a loyalty scheme, citing benefits such as discounts, previews and special offers as their motivation – but, how do you tell if you’re programme is working?  It can be demoralising to discover that your loyalty programme isn’t working – but that’s not an excuse to throw bad money after good. If you suspect that your programme is ineffective, it may be time to re-evaluate and re-develop.  The following are the vital signs which will tell you if you’re programme is healthy, critical or beyond saving.

Repeat purchases – or lack of

The whole point to your loyalty program is to engender loyalty and encourage repeat purchases.  If your programme is not doing this then, to put it bluntly, it’s failing. Although timeframes and particulars vary from sector to sector, if you’re not attracting repeat purchase behaviour, your programme is ineffective and needs to be reconsidered.  It’s time to figure out just where the problem lies in order to fix it. 

The personal touch

You’ve been collecting customer data, right?  What have you been doing with it? If the answer is ‘not a lot’ then, this may explain why your loyalty programme is flagging.  In today’s world, customers expect a personalised customer experience including recommendations, bespoke benefits such as delivery and collection options – this is where the data you’ve worked so hard to collate comes in.  You need to make sure that you’re not only collecting data – but the right data in order to gain an insight into who your customer is and what he or she wants. Simply keeping data in spreadsheets and sending the odd generic email isn’t enough to keep customers interested.  

In 2019, you should be making your data work harder by using it to make smart recommendations to target customers and showing them that you value them enough to find out what makes them tick.  This is all about finding out who your customer is – and what they want; whether its a better choice of delivery times or offers which are more specifically relevant to them based on past purchases. Improving your data leads to better customer profiles and a better customer experience.

Loyalty programmes are increasingly shunned by millenials who want instant gratification. Modern loyalty programmes need to go beyond ‘points win prizes’ (also known as rewards based programmes) and offer surprising and delightful moments that make their customers happy.

Diagram on why loyalty programs fail and how it can help a business improve ROI
Source: Salesforce.

Are your staff keeping the faith when it comes to your loyalty programme?

As ambassadors to your brand’s customer loyalty and devotion, your staff need to be championing your loyalty programme at every turn.  Often, businesses become complacent; with staff not even mentioning the programme until the end of a transaction – when all the customer is interested in is getting home to a cup of tea and the latest Netflix series.  

You need to be educating all staff within your brand as to the importance of the scheme in driving revenue and customer experience – as well as pointing out the benefit to themselves, such as smashing their sales targets.  If you’re staff aren’t fully up to speed with your brand’s ethos, information and technology, you’re fighting a losing battle when it comes to your loyalty programme.

Your loyalty what?

Everybody’s heard of Nectar Card, Starbucks Rewards and Amazon Prime – how about your programme?  It may sound like stating the bleeding obvious but, customers can only take advantage of your programme if they know about it.  If they don’t know about it, it’s time they did. Perform a health check on your programme to find out how much – if anything – your customers know about it.  In order for your programme to reach its targets, you need to invest in shouting about it through your marketing. Take a look at how retailers are constantly one step ahead as they advertise new collections or special offers and take note.

Stale offerings

In order to keep your customers coming back for more, you need to make sure that your programme remains fresh and interesting.  Many brands make the rookie mistake of setting up their programme and then letting it run itself. The idea is to convince your customer that your programme is better than your competitor’s – and you do this by investing time and money to make sure that it’s exciting.

Source: Payfort

Too many bells and whistles

It’s great that you’ve devoted time and energy into your programme but, we’ll let you into a secret – if it’s too complicated, your customers are going to lose interest.  Constantly adding features and guidelines may seem like a way of keeping your programme fresh but, in reality, this can leave customers cold. Today’s consumer is busy – and has a short attention span, therefore, they need to be able to quickly ascertain what your programme is, how it works and what the benefits are to themselves.  Whether in store or online, loyalty rewards should be consistent – and consistently made clear to the customer. Your customer needs to know that you value them – which means offering high value rewards with complete transparency – rather than expecting them to continue to collect points with no clear goals or structures. With a published loyalty scheme, the keyword is simplicity – a simple purpose and a simple execution – this is the way to keep your customers loyal for longer. 

A lack of structure

You wouldn’t launch a new product without putting in place structures for tracking and setting targets – and the same should go for your loyalty programme.  Without proactive structures and tracking, it’s impossible to show just how effective (or not) your programme is. Often, loyalty programmes flounder and fail due to a simple lack of metrics analysis.  In addition, many businesses fail to properly cost the perceived value of the program – particularly in cases where the entire KPI is of transactional revenue; in which case, these should be set at every touchpoint across the business.  This should be the same whether you’re evaluating new sign ups, existing members, repeat purchases, customer reviews and advocacy. Right from the beginning, you need to make it clear across the board as to how your ROI will be measured and how it will evolve.  Your loyalty metrics should sweep across the entire brand from marketing to sales and from development to logistics.

No points without purchase

With most programmes, the only way to collect points is by making a purchase. Customers often state that it takes so long to collect a decent number of points that they often lose interest long before the goal is reached.  As loyalty programmes grow and evolve, they should include benefits for customers from sign-up, all the way through the membership – not just in exchange for buying a product or service. Have a think about how you can reward your customers consistently – whether or not a purchase is made. 

In 2019, loyalty programmes are still very much relevant – but they need to change in line with customer demands.  When it comes to giving your loyalty programme a health check, you can do no better than to ask the experts – the customers themselves!  

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