Five reasons your loyalty program participation rates are dropping — and how to address them.
- The majority of shoppers say a loyalty program influences them to buy again from a particular brand.
- Loyalty program members who stop participating might be quiet quitting.
- A complicated rewards program structure and unappealing rewards are common reasons customers stop engaging with a loyalty program.
- Rewards that are desirable and achievable, plus a simple, engaging user experience can improve loyalty program participation and retention.
- Successful loyalty programs evolve and adapt to customer needs and interests.
It’s no secret that a well-oiled customer loyalty program does wonders for a retailer’s bottom line. According to Yotpo, 86% of U.S. shoppers say that a loyalty program influences them to buy again from a brand, and 44% say a loyalty program highly influences their purchase decisions.1 So if you’ve noticed that your current loyalty program members have stopped participating — and your regular customers aren’t joining — it’s time to take action.
What is loyalty program quiet quitting?
The term quiet quitting has been trending in the news recently to describe someone who does the bare minimum requirements of their job, putting in no more effort than is necessary. Looking at this concept from a retail brand customer loyalty perspective, “quiet quitting” essentially means that your loyalty program members have lost enthusiasm for the program, and that enrollment, engagement and participation have dropped to a bare minimum — and once in this state you run the risk of rewarding customers for shopping behavior they would have exhibited anyway.
Moving members from quiet quitter status to active loyalty program participants starts with identifying the reasons behind their lack of interest. In many cases, it’s not just one problem or issue. But there are some common denominators that can indicate why your loyalty program participation rates are dropping, from how the program is structured to the value of the benefits.
5 Reasons Your Loyalty Retention Rates are Down — and How to Address Them
Discovering the reasons your members may be quiet quitting or abandoning your program altogether is the first step toward turning your loyalty program around. Below we dive into five of most the common reasons program members stop engaging and participating. For each reason we share solutions retailers can implement to improve their program and win back members while increasing engagement, participation and long-term loyalty.
1. The perceived value of your loyalty program isn’t worth the effort.
In this case, members find the program confusing, complicated and too time consuming. The program may have too many rules and restrictions that don’t justify the level of engagement required. Another reason members aren’t motivated to participate could be that the spending threshold to earn a reward is too high compared to the value of the reward.
How to fix it: Simplify the sign-up process by making it as easy as possible for customers to enroll and immediately start participating. To help ensure that the program is easy to understand, create a comprehensive landing page on your website, or even a microsite, that explains in simple terms how to join, earn and redeem. Aim to show members the value of the program upfront, including the immediate benefits they’ll gain once they join and start participating.
2. Rewards are unappealing and irrelevant.
Are your customers earning points but not redeeming rewards? They may just not be that into your rewards. Remember, your members don’t all want the same thing — they have different interests and preferences. So if you have just one reward option, some members may be less motivated to engage with your loyalty program.
How to fix it: Look at your data and listen to customer feedback to identify their interests as well as their pain points. Then build your loyalty program benefits around what your customers want. Giving options — like tiers and multiple ways to engage, earn and redeem — can help make members feel special, and help them view your program benefits and rewards as more desirable. Consider offering rewards that are both transactional and experiential, like a choice between cash rewards or VIP experiences.
The best loyalty programs include a mix of benefits optimized for the brand and its key audiences. Learn how CCG’s Statistical Loyalty Program OptimizationTM model can quantify the reach and desirability of your existing and potential benefits to help you define the optimal mix. Learn more and contact us for a free, no-strings demonstration.
3. Lack of loyalty program awareness.
One of the benefits of creating a retail brand customer loyalty program is that it can help attract and retain a larger pool of long-term loyal customers. But those customers won’t participate if they don’t know about your program and how it works.
How to fix it: Promote your loyalty program at every opportunity, including every customer touchpoint. For example, place a banner on your website that links to your program’s landing page and display in-store signage inviting members to join either in-store or online. Promote the program in customer emails, in your mobile app and on your brand’s social media channels. Be sure to educate your employees about the program so they can act as ambassadors, encourage customers to join at checkout and answer their questions.
Another way to keep your loyalty program top of mind is by communicating with members frequently. Include program information, like point status, in every communication. You can also send trigger communications, like emails and texts, based on their program status. For example, remind them how close they are to redeeming a reward or share actions they can take to bump them up to a higher tier.
4. Your program takes a one-size-fits-all approach.
Are you treating all of your loyalty program members as if they’re the same? A lack of diversity among rewards, limited ways to earn and redeem points, a lack of personalized communication and only focusing on transactional benefits can make a program less meaningful to its members. Likewise, creating only one method of engagement might be enticing to one segment of customers but not all.
How to fix it: Review your data on a regular basis to develop a deeper understanding of your customers. Use personalization as much as possible to make program communications and offers individually relevant. Engage with your customers in ways that are specific to their needs.
For example, consider personalized perks based on a customer’s shopping and redemption history, or their demographic or location data.
Is your customer loyalty program best-in-class or stuck in the middle of the pack? CCG’s Interactive Loyalty Assessment Tool takes just five minutes to complete and can tell you if your loyalty program is reaching its full potential. Plus, you’ll get a personalized report with feedback on your program’s strengths and opportunities for improvement.
5. A poor user experience.
Customers are less likely to engage with your program if the reward redemption process is complicated and if they have a hard time reaching customer service to resolve an issue. Likewise, frequent, poorly communicated rule changes, difficulty accessing program status or an inconsistent experience across channels (in-store, mobile app, website, etc.) can lead to confusion and a poor overall experience with your loyalty program and your brand.
How to fix it: Your program’s earning and redemption process should be painless. To identify any points of friction, create loyalty program customer journey maps. You can also use the maps to identify opportunities to add personalization across touchpoints — helping to increase engagement and participation.
Finally, ensure a positive user experience by providing great customer service that’s readily available via multiple channels. Give employees the training and resources they need to assist members with program questions or issues.
The Most Successful Customer Loyalty Programs Evolve Over Time
Successful loyalty programs regularly adjust and pivot to stay relevant to members. Your data can be a powerful tool to help identify what features and benefits your members want most, making it more efficient to adjust your program to increase participation and revenue. Finally, for optimal engagement, participation and a healthy bottom line, ensure that there’s an even value exchange between what you want from your loyalty program customers and what they expect from you.
Are you ready to take the next steps to improve your customer loyalty program? CCG’s retail loyalty marketing experts have focused on helping clients build stronger, more profitable relationships for more than 40 years. See how our retail marketing services and solutions — including loyalty program development, refinement and management, FasTracksm program implementation and retention program development — can help your organization meet its customer retention goals. Call us today at 303.986.3000 for a free consultation.
Sources
1 “The State of Brand Loyalty 2022,” Yotpo, https://www.yotpo.com/the-state-of-brand-loyalty-2022/, accessed December 1, 2022
