June 26, 2018
Customer loyalty programs are so ubiquitous because data proves that customer retention is the number one driver of a successful business. Driving a first-time customer into your business is five to seven times more expensive than driving an incremental visit from an existing customer. Yet, even understanding the immense value of loyalty, brands are continuing to fail miserably at customer retention initiatives.
Get the Customer Loyalty Buyers Guide to learn about the top reasons these initiatives fail.
There is no doubt that businesses are struggling to make loyalty programs stick. Consumer behavior is changing and affecting the success of traditional programs. According to the Colloquy Loyalty Census, the average U.S. household belongs to 29 loyalty programs but is active in less than half. The dissatisfaction consumers feel towards loyalty programs is echoed in a loyalty study by Bond—almost two-thirds of the consumers surveyed would not recommend the loyalty program in which they’re currently enrolled.
To make loyalty work, brands need to find methods to ensure that loyalty programs are delivering value to both consumers and business by striking a balance between ease of use and depth of data.
Customers are signing up for loyalty programs, but brands are failing to adequately deliver on value and experience—only 22% are satisfied with the level of personalization they experience. Whether it be lack of data or inability to execute on those “personal touches”, loyalty programs are simply falling short when it comes to making customers feel special. VIPs and long-time loyal customers want more than just “rewards” — they want to feel appreciated with exclusive access, experiences, and recognition.