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Loyalty Programs

10 Signs Your Loyalty Program Needs A Refresh

Written by 
Brad Davis
December 2, 2019

“Is my loyalty program overdue for some updating?” 

If you’re asking yourself this question, the answer is probably yes.

In fact, unless your business is running a highly enticing rewards program that immediately persuades customers to join and then continues to engage them in the long term, the answer is yes.

As customer loyalty trends emerge and evolve over time, loyalty programs need adjusting in order to stay relevant to customers’ needs. At Stamp Me, we’ve put together this checklist of 10 symptoms that your loyalty program might need some attention.

If any of the points below sound applicable to your loyalty program, read on to discover how to solve the issue and keep your customers continuously engaged with your brand.

1.     Customers aren’t interested in joining

why people arent interested in joining a loyalty program
Customers aren't interested in joining

If you’re finding that customers who frequently visit your store or make purchases with your business are aware of your loyalty program but choosing not to join it, then clearly your loyalty program is failing to entice them.

This could be because your rewards are dull or irrelevant, or perhaps the signup process is too tedious for them to bother following it through. Whatever the reason, a quick solution to this is to offer an upfront incentive for signing up.

Make sure customers are aware that if they sign up right now, they’ll receive a discount off today’s purchase, or a free upgrade, free side or accessory… whatever you think will be an enticing enough offer to tip the scales from “can’t be bothered” to “I’ll take the time to join”.

From there, your ongoing rewards need to be tempting enough to keep customers hooked on your loyalty program, but we’ll get to that in a moment.

2.     New members are active at the start, but then they gradually taper off

new loyalty card customers dropping off
Declining customer retention

This usually comes down to one simple issue – your loyalty program is boring!

Once the initial excitement of the rewards and discounts wears off, customers are left asking themselves why they continue to engage this loyalty program. If they can’t find a satisfactory answer, they’ll simply drop it.

Having a million loyalty program members doesn’t mean anything if none of them have made a purchase in the last six months. This is where fun side-promotions and spontaneous extras come into play.

For example, businesses that use Stamp Me as their digital loyalty app solution gain access to features like Scratch & Win; a “surprise and delight” mechanism that offers customers the chance to win prizes. Brands can send all of its customers an automated notification with a link to the Scratch & Win game, and it creates a bit of hype around the loyalty program.

Features like Birthday Club are another effective method for keeping things fresh, and reminding customers that your business cares about them and wants to reward them for their loyalty.

3.     Customers aren’t redeeming their rewards

why customers aren't redeeming rewards
Customers aren't redeeming rewards

If a customer has accrued enough points to redeem a reward but fails to do so, it’s likely that this customer isn’t loyal to your brand. The rewards clearly aren’t appealing to the customer, or else they’d be claiming them.

This person frequents your business because they like the product, but they could easily jump ship if another option comes along. However, if your loyalty program offers them something that they actually want, you’ll win their loyalty.

This is when feedback is king – loyalty programs are an exceptional tool for communicating with your customers, so use it to find out what they do and don’t like about your program, what’s working and what isn’t.

Find out what your customers want and give it to them – if a customer isn’t claiming their rewards, then their loyalty is not a two-way street and you’re not holding up your side of the bargain.

4.     Your long-term loyal customers are upset that your brand new customers are enjoying the same perks

look after existing customers
Image Source: Listal

This is a common dilemma that has stung even the biggest household name brands.

In an effort to acquire more loyal customers, brands can often roll out spectacular new incentives and benefits that inadvertently leave their existing loyal customers feeling isolated and hard done by.

Starbucks suffered this issue when it introduced new changes to its rewards program that meant black coffee drinkers now needed to spend thrice as much to redeem the same rewards.

starbucks customer tweets screenshot

A big drawcard for being an established VIP customer to a brand is the status associated with it. Therefore, it’s crucial that you don’t strip your highest spenders of their status, as your top 10% of loyal customers typically spend more than the remaining 90%.

How do you side-step this issue? Introduce a tiered loyalty system.

For example, customers who sign up to your loyalty program today enjoy X benefits. Once they’ve spent $500 with your business, they are promoted to the second tier, where they enjoy X + Y benefits. The small percentage of top-tier loyal customers (who have spent, say, $5000 with your brand) enjoy X + Y + Z benefits.

This might include perks like free shipping on all purchases, exclusive access to pre-sale events, “skip the queue” privileges, and so on.

With 57% of consumers being more likely to participate in a rewards program that has VIP tiers and exclusive rewards, you’re sure to keep your long-term customers happy, while simultaneously motivating your new customers to aim for higher tiers.

5.     You’re receiving feedback that rewards are too difficult to attain

difficulty achieving rewards
Image Source: Vanderbilt University

This is a common issue that businesses experience, and it’s understandable given that no one wants to give away products for free.While it’s natural for a brand to calculate the minimum reward it can offer customers that will still entice them to participate in the loyalty program, the trouble here is that customers are likely to see right through it.

Imagine walking into a shop and seeing promotional material to enjoy a free coffee with every 20 coffee purchases, or visiting an online store and being prompted to spend $250 in a single transaction for a $5 discount.

These rewards don’t reflect the effort required to attain them, and they tell your customers that your brand does not value their loyalty.

If customers are telling you that the rewards are too difficult to achieve, try introducing some incremental rewards along the way that keep customers interested, or perhaps increase the value of the reward. The “surprise and delight” technique mentioned in Point 2 also helps with this problem as well.

Ultimately, you’ll find that by being a little more generous with how you structure your points accumulation and rewards redemption process, you’ll enjoy a higher spike in brand loyalty and customer retention.

6.     Your loyalty program is hurting your bottom line

loyalty program problems
Image Source: Yahoo!

Having said that, there’s also plenty of businesses that swing too far in the other direction and offer rewards that are perhaps too generous. This will cause a sharp rise in signups and customer spending, but isn’t sustainable in the long term.

If your bottom line is suffering at the hands of a loyalty program that is supposed to help your business prosper, it might be time to sit down and restructure your program.

The idea is to find the ideal balance between rewarding your customers for their loyalty, and enjoying increased revenue as a result of boosted sales and customer retention.

So long as customers still see a return on investment for their continued loyalty, a bit of restructuring won’t affect customer satisfaction – after all, if you put yourself out of business with overly generous rewards, no one benefits!

7.     Your recommended products and tailored offers are failing to entice, upsell or cross-sell customers

customer profile infographic

The point of recommended products is that they are being recommended to that particular customer because it’s likely to appeal to them, based on previous products they’ve purchased or searched for. The same goes for tailored rewards and personalised offers.

If you’re finding that no one is making purchases from the list of recommended products being generated for their specific preferences, or changing their spending habits to get the most out of their tailored offers, then the algorithms being used are clearly not hitting the mark.

Invest some more resources into how the customer data acquired from your loyalty program is being used to tailor each customer’s individual shopping experience.

A recent Edelman study revealed that 80% of consumers are more likely to give a brand their business if it uses their customer data to create a personalised shopping experience.

Make sure that all the relevant data is being categorized properly, and compiled in such a way that it directly targets each customer’s unique preferences.

  • What is this customer’s average transaction value?
  • What is this customer’s average frequency of visit?
  • What time does this customer generally place an order?
  • What add-ons does this customer typically opt for?

When the answers to these (and countless other) data points are honed and perfected, your recommended products and tailored offers should be too tempting for customers to ignore.

8.     Your loyalty program is failing to please various customer demographics at once

Image Source: Comstock’s Magazine

In our recent article on Customer Loyalty Trends to Look Out for in 2020, we discussed how different generations seek different things from a loyalty program.

For instance, consumers from Generation X typically prioritise speed, convenience and efficiency, whereas Millennials are more interested in a personalised shopping experience (with perks like tailored offers, as mentioned in the previous point).

The further you delve into different demographics like age, gender, geographical location, income level and occupation, the more you’ll notice differences in the way these various consumers interact with their chosen loyalty programs.

The more a brand can personalise its loyalty program to accommodate each individual customer’s shopping habits, the more success it’ll have. 

At Stamp Me, we suggest making the basic structure of points accumulation and rewards redemption as simple and straightforward as possible – Buy X, Get Y. There’s no room for confusion or misunderstanding, and customers feel comfortable joining as they know exactly how the loyalty program works.

The first thing a new member needs to do is sign up, so make sure the onboarding process is quick, convenient and gratifying in itself.

While a straightforward program with minimal “clutter” is likely to keep older generations happy, the bells and whistles that Millennials and Gen Z are liable to enjoy can be optional. Scratch & Win promotions, referral rewards and other features can either be engaged or ignored – leave it up to the customer!

The more customisable your loyalty program is, the easier you’ll find it to keep all your customers happy, regardless of their preferences. Digital loyalty apps are the best way to achieve this level of customisation.

9.     Customers aren’t aware of your loyalty program

customers unaware of loyalty program marketing

This one is pretty straightforward – thankfully, the solution is as simple as the problem!

If customers aren’t aware of your loyalty program, or they’re hearing about it for the first time after several months of regularly visiting your shop/making purchases with your brand online, then you need to ramp up your promotional material.

There’s no limit to the ways in which you can promote your loyalty program, however, we suggest starting with these four things:

1. Website and social media pages

This is free, and can be implemented immediately. Make sure that your website clearly brings the loyalty program to the attention of any visitors. As for Facebook, Instagram, Twitter and any other social media pages your brand uses, schedule regular posts to ensure customers are hearing about the program, the perks, the rewards, the terms and conditions, the side-promotions, and so on.

2. Referral IncentivesIf you have a physical store(s), it should be practically impossible for customers to walk out of it without being made aware of your brand’s loyalty program through promotional material in the windows, at point of sale, and anywhere else they’re likely to notice it.

Make sure your promotional material highlights the benefits of joining, and illustrates how quick and easy it is to sign up today.

3. StaffTrain your staff to ask customers at the point of sale if they’d like to join the loyalty program today. Educate your staff on the various benefits of the program, and make sure they are well-versed in how the program works so they can adequately answer any questions the customer might ask.

4. Referral incentives

Why not offer loyalty program members rewards for referring their friends, family and colleagues? This is an excellent way to spread awareness of your loyalty program through word-of-mouth, and acquire new customers through the best form of advertising – peer reviews.

In fact, 92% of consumers trust peer recommendations over traditional advertising, and this figure is even higher among millennials and Gen Z.

The most successful loyalty programs tend to offer customers multiple ways of accruing points towards their next purchase, rather than just spending. Offering points for social media sharing or referrals is a win-win.

10.     Customers are experiencing technical issues

frustrated customer
A frustrated customer

You might have the most fantastically-structured and irresistible loyalty program in the world, but if it has bugs and glitches, your customers will get fed up.

Some of the best known brands on the planet have fallen victim to this, and it’s a mistake that can take a long time to recover from, as your loyal customers lose faith in your rewards program and go elsewhere.

If customers are complaining that your loyalty program is letting them down, perhaps it’s time to switch to a loyalty app provider that handles all the digital technology and software side of things for you, so that you can simply focus on the structure of the program and the enticing offers you wish to extend to your loyal customers.

Stamp Me Loyalty Solutions provides businesses with a highly interactive and remarkably simple digital loyalty app, which customers can download and use to accrue stamps and redeem rewards.

If your loyalty program is overdue for a refresh, Stamp Me offers an ideal solution that allows you to stay on top of your brand loyalty and customer retention needs, without the hassle that comes with running and maintaining your own digital loyalty software.

Get in touch with us today for more information on how Stamp Me Loyalty Solutions can help you retain more customers and boost revenue.

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