Cheetah Digital takes us through loyalty programmes, how to recognise when they’re failing, and what to do when this happens.
When your loyalty programme isn’t performing at its best, it can frustrate customers and even threaten your reputation. Even a small change or misstep might generate backlash among your loyalty members, resulting in a negative perception of not just the program, but your brand in general.
Unfortunately, the signs of an under-the-weather loyalty programme are rarely obvious. They’re subtle trends that progress over time and, when left unattended, can lead to serious long-term issues.
To ensure your loyalty programme stays healthy, you’ve got to catch potential problems before they worsen by routinely checking for these tell-tale symptoms.
Registration has slowed or stalled
Have you experienced a significant reduction in programme sign-ups? Has the number of new members steadily gone down over time? While you’ll have to dig deep into your programme’s data to find the root cause, keep in mind that according to research from MIT Sloan, earning points and discounts are the top loyalty programme motivators for consumers — so if they’re not getting them, they’ll likely tune out or look elsewhere.
Members are stagnant and inactive
According to MIT Sloan, only about half of members enrolled in loyalty programmes are active.
If your engagement rate is low, it could be a sign that you’ve stopped providing value to your customers. Your programme might not be user friendly; offers and promotions could be irrelevant or provide little value; or perhaps you are over- or under-communicating with your audience.
No noticeable revenue increase
The end goal for a loyalty programme is just that: loyalty. Committed customers drive repeat purchases and profit for your brand. You may be seeing engagement through your marketing channels and loyalty programme, but if it’s not encouraging transactions, there’s no ROI. The underlying issue here could be that points are too difficult to earn or it takes too long to redeem them for a reward. Again, looking into the data could help provide a diagnosis.
The cure
If you notice one or more of these symptoms, don’t panic. There are ways to mitigate and treat them before your loyalty programme is too ill to recover:
- Make it easy to join and a breeze to access through multiple channels. No one likes a 12-step sign-up process or digging through their email to find the right link.
- Keep the structure simple and be clear about how members can earn points and claim rewards.
- Create a personal experience for every user through detailed segmentation that helps you deliver customised offers and rewards to the right place, at the right time.
- Ask your customers what they want. Survey existing members or cast a wide net to get a non-member perspective on your program. This simple step can help get your programme back on track.
For more information and guidance on loyalty programmes, contact Cheetah Digital.