10 Loyalty Programs Mistakes You Should Avoid

10 Loyalty Programs Mistakes You Should Avoid

No doubt, loyalty programs effectively retain loyal customers and accelerate growth in this digital age. Just the presence of a loyalty program alone impacts the buying decisions for at least 69% of shoppers.

With the increasing popularity of loyalty programs, are you sure you are doing it right? There is no shortage of businesses with failed loyalty programs due to shortsighted assumptions, lack of understanding of financial health and program structure that ends up disappointing the customers.

To avoid such situations, we have curated a Do Not Do This list that will help you navigate and create better loyalty programs that make your customer fall in love with your brand.

Whether you are creating your first loyalty program or not getting the desired results from the existing one, make sure you steer clear of these pitfalls.

What are we waiting for? Let’s dive into it. :

1 Avoid Bombastic Openings

Think before you launch your dream loyalty program with all the bells and whistles at once. There is nothing wrong with it but, it becomes difficult to keep the customer experience exciting later on in a consistent format.

Many ambitious business leaders often make this mistake. They offer so much at once with their loyalty program and later left with very few options to surprise their customers. Imagine launching a loyalty program with half a many tiers that have tough and unattainable criteria, gamification, contests, and a few mystery gifts. This can be too much to start with. Though there is nothing wrong with building excitement, you just need to save something for later to delight your customers. So avoid giving everything at once. Let your customers wait for the exciting features or reward programs. Set member’s expectations high, they will definitely feel delighted and if the new features are great they will believe it’s worth the wait hence increasing your brand value.

2. Don’t over-complicate things

When it comes to rewarding programs, there is no reason to reinvent the wheel. If your loyalty logic is complicated and not easy to understand for the customers, they will quit the program. For example, frustrating sign-up or a confusing structure is a big no while creating a loyalty program. Offer a simple sign-up process and also add a well-designed explainer video for your loyalty program to help your customer understand your intentions better. Make sure you are not making the system too generous for customers in the beginning. It will cause issues later on leaving customers confused and dissatisfied.

3. Don’t shy away to reward your customers

The motive of a loyalty program is to promote long-term engagement and increased customer lifetime value.

Try focusing on your loyalty program’s long-term benefits, and don’t be afraid to reward your customers. Showering with too many benefits at the initial stage will work in your favor. Also, don’t make the mistake of not reminding your customers to use their points. It is a classic mistake that short-sighted businesses make all the time.
Don’t prevent your customers from having benefited from your loyalty program. They will come back for more.

4. Don’t miss out on the power of referrals

Word of mouth is still a powerful tool. Customers would always value opinions coming from their family and friends. You will miss out on many loyal customers with a 10/10 feedback rate. Always include referrals in your loyalty program. Not asking for referrals leads to low engagement, and you won’t be able to gain new customers.

You don’t need to follow a familiar trend for the referral program; you can create a progression system with milestones such as better rewards for customers with the highest invites. You can also offer free shipping for the members who invited their family and friends.

5. Not using an Omnichannel platform

Lacking an omnichannel loyalty program will refrain your customers from a mobile experience. You can delight your customers in so many ways with an engaging mobile app and using any other channel. Don’t miss out on this opportunity.

Today, Omnichannel is more of a hygiene factor than a unique feature in loyalty programs. Customers can join and track reward programs using their mobile devices. A successful omnichannel program connects customers to the brand across all channels, and the customers can start a loyalty journey without any hassle. It allows customers to redeem points on both offline and online fronts. Having an omnichannel loyalty program the expectation that businesses should live up to.

6. Not wanting to reward non-transactional activities

The main motive of next-gen reward programs is to engage customers outside of the buying cycle. In simple words, rewarding your customers for non-transactional activities, such as writing product reviews, being active on social media, recycling old products, or filling out surveys.

Don’t underestimate the importance of these non-transactional activities. You will miss out on so many valuable points that your customers may earn with these activities. Here you are giving them a chance to earn rewards. As a result, you will attract more customers.

7. Not willing to Surprise your customers

Who doesn’t like variety? Always try to surprise your customers by adding some variety to their lives. Is it too much? Surprise & delight is the key to a successful loyalty program.

You will gain customer engagement, brand loyalty, and so much more by surprising your customers. Create exciting reward programs for your customers to keep them engaged and delighted.

8. Not including social media in your loyalty program

Today, the majority of people are on social media. It is true for the millennials who currently account for 90% of global social media usage, and 95% of web users between the ages of 18 and 34 follow at least one brand on social media. These insights are amazing!

If you want to be successful with your loyalty program, don’t underestimate the power of social media. It helps in giving an omnichannel experience to the customers and allows them to engage with your brand.
You can extend your program reach using social media and reach out to an audience who are not currently associated with your brand. Engage your customers on social media – reward them for sharing product pages by offering them points. And organize Instagram hashtags and contests to build excitement.

9. Not able to find cracks in the system

Some people want to get an unfair advantage from loyalty programs. They will try to find loopholes in your loyalty logic, duplicate points and progress faster than other members. It is a sensitive issue for the brands. You have to be prepared to tackle such scenarios. While testing your program, look for possible loopholes and rectify the problem right away, even if it is found after the launch of the loyalty program. You can remove the feature at all.

10. Not having a clear understanding of ROI

This is a common mistake that businesses make all the time. Business leaders should have a full understanding of loyalty programs and must know how it drives profits in the long run. Whether it is about paying off against the sales or bringing new customers. A clear understanding of ROI is a must before you plan to have a loyalty program. Just make sure your proposed loyalty program strategy is perfect given your current business model and financial health.

Wrapping up

The loyalty program is all about offering a great customer experience. You can offer an amazing experience to your customers only if you know what they like. For that, you can use a CRM system that bridges a gap between customers and businesses and offers valuable insights about your customers. It will help you build a successful loyalty program.

Do you want to build a perfect Loyalty Program and build a personalized customer experience for a lifetime? Feel free to get in touch with us. We will show you how understanding your customers can help in building an amazing program that your customers would love to join.

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