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How to Bounce Back from Customer Loyalty Program Buyer’s Remorse

April 18, 2018
by Sara Spaventa

Have you tried a customer loyalty program and weren’t too thrilled with its results? There are dozens upon dozens of loyalty programs to choose from, so it’s not surprising to hear that a growing number of companies feel let down by a loyalty program they selected.

Companies spend $2 billion on loyalty programs in the U.S. every year, according to Capgemini Consulting. If you shelled out good money for a loyalty program, and it was a bust, you’re probably experiencing some serious buyer’s remorse.

If you’re frustrated with loyalty programs, don’t give up. Loyal customers are valuable. Research shows loyal customers spend 66% more than your average customers. It’s worth identifying and rewarding loyal customers to ensure this special niche keeps coming back to your business.

After picking the wrong loyalty program, how do you bounce back from buyer’s remorse? In this post, we’ll share how to get back in the loyalty saddle. 

Why companies abandon loyalty programs

Before picking an effective loyalty program that’s right for your business, it’s important to understand what you didn’t like about the program you already tried. Here’s a look at the most common reasons for companies to abandon a loyalty program:

  •      Lack of planning

A lot of companies pull the plug on loyalty after a lackluster start. A loyalty program needs a launch plan. You need time to train staff, promote the program to your customers, and generate a little buzz.

If you launch a loyalty program without doing any prep work, you might be disappointed by the number of sign-ups you get and inevitably call it quits. All successful programs depend on scale so investing in promoting your program to your customers and prospects is well worth it.

  •      Low participation rates

Sometimes, companies launch a loyalty program and have some success getting customers to join, but then – nothing. Customers aren’t into it.

Customers aren’t redeeming rewards, they’re not shopping any more than usual, and you’re not seeing the bump in sales you were hoping for.

What went wrong? Customers have high expectations for loyalty programs. Research suggests customers stop caring about loyalty programs because of:

  •      Irrelevant rewards
  •      Rigid reward structures
  •      Poor online and mobile experience
  •      Poor customer service

Basically, low participation rates all boil down to a poor customer experience. Most customer engagement platforms offer extensive resources to help you promote and manage your program so it increases revenue and is a positive experience for your customers and team. Today’s modern loyalty programs should offer personalization of rewards and ultimate flexibility in the reward structures and offers available.

  •      The program was aimed at the masses

A loyalty program shouldn’t treat every customer the same, and the sad truth is many programs spit out generic rewards in hopes of bringing a customer back.

If your previous loyalty program catered to the masses, it’s not surprising that you walked away. You need a customer engagement platform that can identify your best customers and provide rewards that are relevant to them. It sounds like a standard feature for loyalty programs, doesn’t it? And yet, only 11% of loyalty programs give companies the tools they need to offer personalized, relevant rewards based on a customer’s spending habits.

  •      An old-school program in a modern, digital world

Apparently, some loyalty program creators are still partying like it’s 1999 and customers (and companies) aren’t having it.

Research shows 66% of companies that saw a decrease in customer loyalty over the last year did not have a mobile app.  

The message here is: go mobile or go home.

That means old-school programs like punch or plastic cards should go by the wayside, just like mood rings and rollerblades.

What to look for in a new loyalty program

You probably quit your previous loyalty program for a combination of reasons listed above, so what should you look for in a new program? Here’s what you need to launch and implement a program that you and your customers will love:

  • A program that goes beyond rewards

A loyalty program is about more than awarding points and offering deals. You need a program that captures data, gives you a platform to connect with customers, provides the ability to collect feedback, and offers an easy way to reward your best customers with personalized rewards.

You don’t want a loyalty program; you want a customer engagement platform.

  • A program that helps you hit the ground running

Look for a company that helps you kick-start a loyalty program. Any reputable loyalty company should be invested in your success. Look for a company that helps you create promotional material to ensure your launch date (and every day that follows) gets the results you expect.

  • Access to customer-identifying data

Most loyalty programs don’t offer much data, especially punch cards. If you can’t capture and analyze customer data, there’s no point in having a loyalty program.

The core of every effective loyalty program is data. Look for a customer engagement platform that captures customer information, like how much they spend and how frequently they visit. With the data, you can identify your VIP customers, analyze their spending habits, and send relevant offers.

  • A platform to connect with customers

The foundation of customer loyalty is a strong relationship. You build a relationship with customers the same way you do with friends and family. You establish trust, learn about each other’s likes and dislikes, share experiences, and communicate.

Your next loyalty program should give you the tools you need to build that relationship. Look for a platform that gives you the ability to collect and respond to feedback as well as send push notifications to customers with personalized deals. Simply replying to feedback has been shown to increase revenue up to 22%.

  • Personalization options that are easy to use

Your customers have access to a bunch of great deals, so your offer has to stand out. You have to send personalized messages to succeed – that goes without saying – but you need a customer engagement platform that makes the process simple.

You should be able to identify your VIP customers, for example, and send them messages that they’re eager to redeem. Thanx merchants see a 17% spending increase from elite customers because owners are able to offer specific rewards.

You should be able to create your own customer segments based on the products that customers buy or when they typically come to visit your business.

  • A mobile app fit for the modern age

No one digs through their wallet for punch or plastic cards anymore, so you can eliminate those options for your list immediately. Look for a customer engagement platform that’s mobile. We’re not just talking about a mobile option – we’re talking full-blown app usage here.

Within the app, customers should be able to see their reward status, make digital payments, and connect with management to provide feedback.

Wrap up

Investing in the wrong loyalty program shouldn’t keep you from investing in customer loyalty. If you take steps to reward your most valued customers, you can see great results – the kind of results that impacts your bottom line.

Get the Customer Loyalty Buyers Guide to learn more.


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