…and how to win them over
The vast majority of shoppers today are involved in at least one loyalty program, but a few common mistakes can drive customers away from yours. Luckily, you can remedy these missteps with a smarter and more thoughtful implementation of your loyalty program.
Problem: Customers don’t buy enough to meet the rewards threshold
Solution: Of course you want to encourage higher sales, that’s one of the biggest perks of having a loyalty program, but you need to be realistic. You may need to reevaluate your minimum limits based upon your product pricing and shopper demographics if very few people are spending enough to actually achieve any rewards. Ask yourself if you’re expecting unreasonably high sales and then adjust your reward structure to encourage spending, but not make your clientele feel priced out.
Problem: Too much marketing material
Solution: We all want our businesses to be top-of-mind when customers make buying decisions, but many feel incredibly overwhelmed or annoyed with daily emails. Eventually, it becomes white noise and all your marketing efforts will just end up filling their junk folders, or worse, causing them to leave your loyalty program entirely.
To counteract this, build in options that allow them to either opt out of marketing or only receive them on a more occasional basis, like weekly or twice a month, to make it more impactful. If everyone is opting out of frequent marketing, it’s time to reduce how often you’re sending it out.
Problem: It’s too complex/time consuming
Solution: You need to make the sign-up process as user-friendly and convenient as possible. Allow customers to easily sign up in multiple locations on your website. In retail environments, update your POS system so employees have the ability to input customer information on handheld devices. If you wait until customers reach the cashwrap before trying to sign them up, they’re often in too much of a time crunch and won’t respond well.
Helpful hint: while knowing a customer’s address and other detailed information is fantastic for expanding your demographic knowledge, make it an optional field if there is no shipping involved.
Problem: Rewards aren’t worth it
Solution: As we’ve discussed previously, finding the ideal balance of rewards that will retain customers without losing money will take some trial and error. You’ll need to research, so check out what your competition is doing (both direct competition and levels above) and even ask customers directly. It will take extra time, and an evolution of options, but what good is a loyalty program if it doesn’t actually inspire loyalty?
Problem: Customers get bored
Solution: Offer a variety of perks to capture as much interest as possible. Besides tiered monetary rewards, consider giving access to members-only events, advance notice of flash sales, or double reward points during certain periods in the year, like when business is slow and you want to increase foot traffic or when you experience very heavy competition, such as around the holidays. If you notice decreased interest or payoff in your loyalty program, it’s likely time to adjust or expand the rewards you offer.
Ready to implement a smarter loyalty program? Contact HBS for the one-on-one support your business needs.