The Top 5 Loyalty Program Fails (and how to fix them!)

Posted by Erika Stevens on Wed, Aug 14, 2013 @ 11:00 AM

Even though loyalty rewards programs are created to reward customers and grow business sometimes you just miss the mark.  Or maybe you go most of the way but forget a few key pieces.  I have compiled what I think are the top loyalty rewards programs fails from a customer standpoint.  None of these mean your business or your loyalty program is doomed – they are just a chance to turn things around and grow.

Twitter Fail Whale

One of my favorites the Twitter Fail Whale.

Number 5 – Making members jump through hoops

                The fail - This could be enrolling, redeeming or just asking a question about your rewards program. 

                The fix – Step back and walk through all of the aspects of your program as if you were a customer to see how it easy it is.  Better yet have a friend or family member secret shop your program.  If there are confusing areas or things that don’t work – fix them!

Number 4 – Impossible reward levels

                The fail – Because your reward structure makes it hard to ever receive a reward, members become frustrated or uninterested in participating.

                The fix – Evaluate customer spend or frequency to determine a reward structure that makes financial sense for you and is valuable for the member.  This is also a perfect time to listen to customer feedback about your rewards program.  You don’t need to make the rewards levels easy to reach, but members should be able to earn rewards for their loyalty. 

Number 3 – Trying to do too much

                The fail – You are trying to run a rewards program, referral program, coupons, social media and it is just too much!

                The fix – All of these marketing efforts can work together cohesively as long as you have a plan.  Figure out ways to connect all these marketing channels.  Links are time and energy savers, so build your primary promotions on your website and then link to Facebook, Twitter, etc.  Utilize all channels to get members to join your program.  For example, if you want to be active on Foursquare have your special be a free drink when you check in and join the rewards program.  Instead of having a separate referral program, give bonus points when customers refer a friend. 

Number 2 – Uneducated employees

                The fail – Your employees don’t know about your rewards program so they can’t encourage customers to join or explain the benefits.  Worse yet when a member tries to redeem, they have no idea how to do it!

                The fix – Make your rewards program an integrated part of your culture and training.  Be sure employees understand and believe in how great the rewards program is so that they are advocates of it.  Have employee contests to see who can enroll the most members or give awards for the employees who ask 100% of customers whether they are part of the rewards program.  The best part of a loyalty program is that it is all good news for your employees to share with your customers because it is typically free and they get great deals.

Number 1 – Doing nothing

                The fail – You start a loyalty rewards program and then just forget about it.  You don’t have signage, you don’t talk about it on your website or social media, you don’t send promotions.  When someone wants to use a reward it becomes an annoyance.  

                The fix – Revive your rewards program and get members excited!  Figure out a new reward to add or a special promotion to send.   Find a loyalty partner who can make your program operate on auto-pilot with pre-developed email promotions that are sent for joining, if you haven’t visited in x days, when you have a reward and the annual birthday.  This way every member hears from you at least 2 times a year.  Include the rewards program in every channel you market it.  As mentioned in Number 3, getting a customer to become a member and provide you with permission to market is worth more than gold.  Exposing the program no matter where the consumer is looking will increase your penetration and will give you valuable information about your customers.  The result is the ability to target your marketing messages more effective.

If you business is currently experiencing a loyalty program fail, don't get discouraged.  Take it as an opportunity to turn things around and start using your rewards program to reward your customers.

Download our whitepaper below for ten tips for customer rewards program success. 

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Tags: Loyalty Marketing