10 Ways to Turn Loyalty Marketing Mistakes Into Profit

November 7, 2016CCG Retail Marketing Blog

Loyalty marketing is moving fast out there, and as we help marketers battle to most effectively earn and keep customers, some issues repeatedly appear. Here are 10 of the top mistakes we’ve seen – and how to fix them.

  1. Ignoring the Big Picture
    Take a step back and conduct an in-depth customer communications plan review to ensure a cohesive message that upholds brand and program promises.
  2. Focusing Solely on the Sell
    Special offers grab attention and pull customers in, but overused, get marketers tuned out. Leverage data — yours and third-party appends — to find relevant reasons to get in touch.
  3. Not Using Data to Maximize Loyalty
    More loyalty marketers need to sift through big data and act on it to impact the bottom line. Start by focusing on best customers.
  4. Taking No for an Answer
    Convince management that the right content works with research and relevant statistics, including consumption and behavior statistics.
  5. Letting Good Rewards Go Bad
    Weakening loyalty redemption rates and uncomfortably high outstanding liability are early warning signs for customer engagement and profitability.
    Fixes:

    • Analyze breakage (the amount of points that are rewarded but never spent)
    • Ramp up redemption with the right messaging.
    • Use data to keep rewards fresh
  6. Breaking Badly
    Know the difference between good and bad breakage:

    • Good breakage occurs when those members who passively participate in your program do not receive rewards.
    • Bad breakage happens when customers get frustrated with program complexities or insufficient rewards. Fix this fast with member research.
  7. Ignoring Millennials
    This largest US generation and fastest growing group of consumers is changing marketing rules.

    • Offer tailored, exclusive content
    • Use responsive design
    • Make rewards entertaining
  8. Under-Emphasizing the Reward Moment
    The moment when customers redeem a reward is a big deal; make it feel like that.

    • Make the reward delivery special
    • Recognize the moment
    • Help them share the fun socially
    • Sustain the excitement
  9. Assuming Your Customers
    Will Shop with You Anyway
    Some CEOs thinking loyalty programs don’t enhance margins. Wrong. The U.S. is the most over-banked and over-stored country in the world. Loyalty makes the difference for both frequency and spend.
  10. Not Giving Status Updates
    When consumers don’t know where they stack up in a rewards program, they stop paying attention — and more importantly, they’re not motivated to change their shopping behavior.

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