Why Do Loyalty Programs Fail?

Our friends at The Loyalty Academy recently released a report concluding why Loyalty Programs Fail. As always, it was an interesting read but for those who may want a condensed version, here are my top 5 picks that I see cause Loyalty Programs to fail. 

1.     Lame Rewards / Benefits

First step in designing a loyalty program is to understand your market. That includes finding out what appeals to them, what is going to motivate them and therefore what will drive the desired behaviors. If you don’t have the right rewards or benefit on offer then the program will not deliver the desired results.

2.     Inadequate Communications and Dialogue

Loyalty programs are often some of the best kept secrets because there is not an integrated communications plan underpinning every touchpoint with your customer, channel partner, or trade partner. A business must consider all communication channels (social, digital and physical) otherwise they are at risk of missing an opportunity

3.     Measuring Performance

All good programs should have SMART goals to measure their program's performance against. If these goals are absent, unrealistic or are obscure your program is set to be seen to fail (even if in reality it is not failing). Know what you are trying to achieve upfront, set realistic, clear and measurable goals and regularly review and optimise execution to work towards these goals.

4.     Employee Disengagement

Your employees are a critical ‘cog’ in driving your program’s recruitment, engagement and redemption. Whether it be sales people, account managers, product marketing, customer service, delivery personnel or other job roles that interact with your customers and partners, their responsibility is to continuously reinforce the program’s benefits and recruitment / retention of members.

5.     Ineffective Optimisation

This is actually one of my own picks. Programs can very quickly become boring if there is not a dedicated person who is regularly assessing the behavior of members, reviewing competitor programs, gathering feedback from your members and keeping the design, technology and content updated. Ongoing program management and optimisation is critical to ensuring members keep coming back.

I welcome feedback and discussion on what your top 5 reasons are that cause a loyalty program to fail.