Blog Article

The 10 Most Common Mistakes of Loyalty Marketing

Author: Paystone

Although marketers are now much more knowledgeable about Loyalty than they were 10 years ago, many mistakes are still being made and, unfortunately, they usually prevent organizations from obtaining the value of true loyalty.
A recent article on shared this list of the 10 most common mistakes of Loyalty Marketing:

  1. Deploying a one-size-fits-all program
  2. Setting reward levels without talking to customers
  3. Not celebrating and not encouraging use of rewards
  4. Jumping in without a clear, long-term strategy
  5. Bombarding program members with irrelevant offers
  6. Setting a reward expiration period that’s too long – or not at all
  7. Failing to deliver seamless mobile loyalty
  8. Offering rewards that don’t measure up to other discounts
  9. Not measuring the impact of the program
  10. Thinking you’re done when the program goes live
  11. Not thinking about how the customer data (captured from the loyalty program) can be leveraged to improve business decisions.

I personally agree with the whole list, but particularly with points 3 and 5. Here’s why:

First of all, it is critical in the loyalty strategy, to make sure members are appreciating the program. One of the first signs is certainly the use of rewards. When a member is redeeming points to get a reward, most of the time, it demonstrates that he does appreciate the value of the program. Not only will he be happy about the reward, but he will also be very likely to become a more engaged customer — which is something that has already been proven through analytics. This is why encouraging the use of rewards is so important & crucial. Each time a member redeems his points, it increases the retailer’s chances to retain that customer, which should be a top priority for any marketer who has invested in a loyalty program.

Furthermore, as the base of a loyalty program is to better know your customers, an organization that bombards members with irrelevant offers is simply a waste of money.

When this situation happens, the marketer should definitely reconsider how to properly leverage the program data and extract all the value in order to obtain the highest degree of relevance. When a customer decides to enroll in a loyalty program, the retailer should never underestimate the expectations from that new member. The value provided by the program should be way more than points and rewards. Retailers should understand that it is a privilege to be able to communicate directly with a loyalty member and this opportunity must be highly taken care of.
Again, this list is spot-on, but I would add one more mistake because it will resonate with any company that is in the process of implementing a loyalty program.

Regarding point 11: 

Most of the time, the decision to design a loyalty program does not take non-marketing aspects into account. The loyalty card itself should only be seen as the data generator. The real value and best return on investment must come from the customer insights the data generated and how those learnings can help marketers make business decisions that are better aligned with customer needs.

Finally, please remember that customer loyalty is a true science and, although the mechanism of a loyalty program can be pretty straight forward, the expected results of its application should always be evaluated against the customer insights it generates — not the promotional aspect we are all tempted to be seduced from.