loyalty program failures
Loyalty Strategy

7 Deadly Sins of Loyalty Marketing

Photo by Cullan Smith

As I continue to observe loyalty programs across multiple sectors, time and again I see failures that can readily be solved-for. These sins are committed on a daily basis in both consulting and managing global client-side programs. There is no excuse for their existence, but time and again they are apparent to the trained eye of an expert practitioner. Likewise, the program member is not delighted, but rather frustrated by the inability of either the strategy consulting firm managing the program, or technology platform provider to improve on user experience. So, it’s time to reveal those sins to the light of day!

Out-of-Control Deal Loyalty

Giving away discounts, dollar savings the same week, or over the same timeframe that loyalty points or program currency are offered. Use your value proposition wisely. Don’t chase sales by driving down your margin on goods sold and at the same time escalate your liability. Work ahead and communicate through progressing by effectively teaming with your merchant planning and analysis team for well-coordinated promotional planning.

Can’t Find the Loyalty Program

Where is it? In the footer of your website. Seriously? You’ve got a financial model that projects incremental lift from your best customers, customers that per The Pareto Principle are delivering 80% of your sales but only 20% of your member population and the program isn’t worthy of a prominent position on your main landing page – what gives? Fight back with the e-commerce team and get your program some real estate.

Advertised it, But Forgot to Support it

This is even worse, where the loyalty agency builds a program, informs and integrates at the floor level and yet the website team is clueless. I love how program leadership has achieved prominence with the Chief Marketing Officer so that they support having a rewards or recognition or loyalty program featured in a broadcast spot. In my past, it wasn’t until the program met an arbitrary threshold before I could get that kind of support. So, what gives that a program can be one of the key features in a campaign and clearly something that will be core to the brand’s identity and yet nothing is found on the brand website, nor the mobile app?

Stop Harassing Me

Before launching a loyalty program, a planning process is needed to figure out the sequencing of email communications – member vs. non-member, transactional thank you’s, welcome messages, promotional and partner messaging. For brands that have multiple entities and/or share an opted-in email across the enterprise, a member might receive 10 or more emails in a given week. Plan ahead, gain alignment, share plans, gain understanding on priorities across the corporate enterprise. Most importantly, the ESP (email service provider) should step in and act as “traffic cop” so that the ecommerce business doesn’t double up on what store marketing seeks to accomplish in any given week.

Where is the Insight

Number 1 complaint from members? You know me and you aren’t showing me that you know me. The failure of loyalty programs to support in-depth analytics coupled with strategic insight to inform true personalization is shocking. Why do programs suffer from so much member inactivity? Why are your open rates crashing? Start from square one and dig into the data, re-configure your creative and begin to effectively leverage creative assets, create new messaging, re-fresh the look/feel of your creative to match what you know or believe you know about your program members.

Also Read: 7 Steps to Loyalty Implementation and 10 Common Mistakes

Innovation, What’s That?

For a loyalty program to survive, yes even for a brand to survive in tough competitive categories it is essential to innovate. Try new and different strategies and tactics. Explore new partnerships that keep the program offering fresh and different. Test and Learn to inform and refine. If you say you don’t have the bandwidth to implement, pull back on something less valuable that you are implementing today and shift resources. This is way too important to not commit your team and support partners to plan-for and measure every business day.

I left the best for last …

Financial Modeling

Wow, you say I forgot all about that tricky model we built to justify the program business case. Really? Haven’t looked at it in months, over a year? Nice. Things must be perfect and you are hitting all your lift parameters. Enrollments – check. Liability – check. Redemption Rate on Rewards – check. Average Order Value – check. Renewals on a Paid Model – check. Margin on Goods Sold – Check. Lift on a Redemption Event – check. Frequency of Visit – check. Lift to Online Conversion – check. That is a lot of checks, right? If there is one sin to avoid, this is it. It all starts with accountability.

David Slavick is a Digital Global Strategist and Technology Expert in CRM/Loyalty Innovation.

7 Deadly Sins of Loyalty Marketing
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