10 Reasons Customers Are Abandoning Your Loyalty Program (and How to Save Them)

May 30, 2017
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If you’ve spent some time looking into the benefits of retention marketing, you’re probably very familiar with the success of customer loyalty programs.  From points, to referrals, to VIP tiers, more and more brands are using rewards programs to build stronger customer relationships and the investment is paying off.  Surveys have shown that up to 87% of customers are actively looking to engage with loyalty programs.  In fact, only 16% of shoppers aren’t involved in any type of rewards program.  

abandoning loyalty program looking to engageRewards programs are an obvious solution to many problems facing today’s brands which makes it easy to feel like they can do no wrong. However, a poorly managed rewards program can create a pretty awful experience.  There are even some rewards program “crimes” that most customers simply aren’t willing to forgive you or your brand for.

We’ve put together a list of the 10 worst offenders, so if you’re committing any of these rewards program crimes we’re here to bail you out.

 

 

Creating an Account

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There are few things more frustrating to shoppers than being put through the ringer when it comes to creating an account.  Customers, both online and offline, are looking for convenient shopping solutions that can deliver value quickly and easily.  This means that a registration process that requires customers to fill out extensive forms or navigate through multiple pages will be a real turn-off that could prevent up to 70% of your customers from signing up.

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Call me Captain Obvious, but if your registration process is too long or complicated, the best solution is to simplify it.  Minimize your registration form so that it can all be seen above the fold and critically assess what information you’re going to ask your customers for.  

abandoning loyalty program corie clark account creation

As you can see with this example from Corie Clark, customers are only required to provide four pieces of information.  While it might be interesting to collect as much data about each customer as possible, take a step back and assess what you actually need to know in order to reward them.  Good relationships with your customers will prompt them to share more with you in the future, and respecting their time and privacy now is the perfect way to start building that trust.

 

Program Mechanics

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Points-based loyalty programs have been around for over 100 years, which means your customers are likely already very familiar with the mechanics.  This familiarity can breed easy adoption and encourage customers to sign up, but only if you keep it simple.  Too often brands try to spice up their program by adding new rules and complicated conditions, but instead of generating excitement it just frustrates shoppers.

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When it comes to rewards programs, there’s no reason to reinvent the wheel.  Points programs are still successful because they’re easy to understand and even easier to track.  With this in mind, the best way to take your program to the next level is with a well-designed explainer page.

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A dedicated program page gives you the chance to define your program with text and images, effectively eliminating any confusion customers could have about how your rewards program functions or what it can offer them.  

 

User Experience

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With so many digital experiences available at their fingertips, customers have grown accustomed to good design and responsive interfaces.  That makes it completely unacceptable to run a program that looks like it hasn’t been made a priority.  Broken links, ugly design, and other visual noise are surefire ways to lessen the appeal of your loyalty program and get your customers heading for the door.

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Putting your brand front and center can be the difference between customers trusting your program or walking away from it.  When they see a logo and  colors they recognize attached to your program, they’ll automatically associate the good feelings they have for the rest of your brand with what you’re offering through your rewards program.

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This makes it imperative that your program be properly branded from top to bottom.  This includes logos, colors, and product photography - all of which you can see at work in epic matcha’s program above.  

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Choosing a rewards program solution that allows you to customize each of these features (like, oh I don’t know, Smile.io) will make your job easier, your customers happier, and your program feel fresh, exciting, and engaging.

 

The Rewards Menus

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While your customers might be interested in the same types of products, they’re not all interested in the same kinds of rewards.  Just because dollars-off coupons work for the majority of your customers doesn’t mean they’ll appeal to everyone.  Offering only one type of reward can paint your loyalty program into a corner by lowering its perceived value for prospective members.  This is particularly dangerous for brands that exist in highly competitive, discount-driven markets like cosmetics, supplements, and ecigs.

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When I was a kid, there was nothing more thrilling than getting to choose the toy for my Happy Meal at McDonald’s.  Although the reward was small, being given the choice for what I’d receive was extremely exciting.  

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This same principle should be applied to the rewards in your loyalty program!  Whether it’s free swag, a variety of transactional rewards, or free shipping, giving customers a choice automatically increases the appeal of participating in your program and adds a level of customization that customers crave.  Offering your customers options for how they can redeem their rewards can go a long way to improving your customer experience and program engagement.  

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Program Maintenance

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Do you ever feel like you’re finally getting the hang of something only to have the rules changed on you?  For me, it was learning calculus but for your customers it might be your loyalty program.  We here at Smile.io would be the first to say that rewards aren’t not a set it and forget it tool, but that doesn’t mean you should be bombarding your members with changes.  While change is sometimes inevitable, the more of it you have the less stable your program looks.  These misunderstandings are what will have your customers running for the hills.

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As I mentioned, sometimes change can’t be helped, and chances are a lot of the changes you plan on making to your program are for the better!  With this in mind, the best way to get in front of these “disruptions” is to communicate them clearly to your members.  

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Often the problem isn’t with the change itself but rather the lack of communication.  Nobody wants to be blindsided, even if it’s by something good, so make sure to let your customers know what is changing, how that change impacts (and hopefully benefits) them, and what they can expect from your program in the future.  You can do this through social media, email, or customer support.

 

Marketing Strategies

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Have you ever heard of the Law of Diminishing Marginal Utility?  In case you’re not familiar, it basically states that the more people get of any one thing the less valuable it becomes.  In the context of your loyalty program, this is most likely to happen with your rewards and special promotions.  No matter how great your offers are, customers will eventually get bored.  Rewards are only exciting when they still hold value.

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The best way to inject a bit of excitement is with bonus points events.  With no idea when to expect them, bonus points give you the chance to create truly memorable experiences for your rewards members.  

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Whether you choose to run your event over the course of a day, a weekend, or a month, bonus points can be used to spice up the value your program has to offer without requiring you to completely restructure your program.  It it’s not broken, don’t fix it - just give it a bit of a facelift!

 

Member Engagement

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If I asked you how many loyalty programs you’re enrolled in, would you be able to answer?  Chances are you’re enrolled in more than you think - you’ve just stopped engaging.  53% of rewards program members stopped actively participating in at least one program over the past year, with only 7% officially opting out.  This is most likely due to the fact that customers are engaged in too many programs to keep track of.  As a result, customers forget they’re enrolled and start shopping your competitors in search of a better customer experience.

abandoning loyalty program solution behavioral emails subtitle

A simple way to remind people that they’re enrolled is to, well, remind them!  Incorporating behavioral emails into your marketing strategy is the perfect way to meet shoppers at every stage in the customer journey.  

abandoning loyalty program sephora reengagement email

By determining a disengagement threshold, you can set up email campaigns that target customers who haven’t revisited or engaged with your brand in a while.  You can even up the ante by offering bonus rewards or special incentives like Sephora to create more ways to draw them back into your brand and loyalty program experience.

 

Redeeming Rewards

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There are few things that will have customers looking for the exit quicker than points they can’t redeem.  After all, what’s the point of earning something you can’t take advantage of?  Technological hiccups and related program issues are extremely detrimental to your customer experience, and will leave customers questioning whether they can truly trust and depend on your brand.  

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Choosing a loyalty program provider that can stand up under pressure will do wonders for the reputation of both your program and your brand as a whole.  Here at Smile.io (shameless plug, I know) we’re confident that our software can make sure you’re never leaving your customers (and their rewards) in the lurch.  

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Even on Black Friday, a program built by Smile.io will ensure you’re delivering a world-class customer experience with every transaction, with no points lost and no time wasted.

 

Customer Buy-In

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When you don’t know how close you are to reaching a goal, it can be very hard to stay motivated.  No matter how badly you might want something, it can begin to lose its lustre without a real way to track your progress.    

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This phenomenon, otherwise known as the Goal Gradient Theory,  is especially true within a points-based program.  While points are valuable within the context of your program, customers can easily lose track of how many they’ve earned or how many they need to take advantage of the awesome rewards you’re offering.  Without these types of benchmarks, it’s difficult for customers to remember why they joined in the first place, leaving you with disinterested customers and even more unredeemed points.

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Showing customers how close they are to their next reward is an incredibly easy and impactful way to motivate them to continue engaging.  This principle is most commonly seen in punch card programs, but can be done within a standard points-based or tiered rewards program as well.  

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When customers can see how close they are to their next reward, it becomes much more tangible and thus more valuable.  This will boost their desire to engage and keep them coming back for more.

 

Increased Competition

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As retention marketing continues to pick up speed, the biggest hurdle for your rewards program will be that everybody else also has one.  57% of brands have indicated that they intend to increase their loyalty program budgets this year.  This means that if at any point your program doesn’t meet their expectations, they’ll be able to find a brand that can.  With so many options to choose from, your program can easily be lost in the shuffle.  

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At the end of the day, the success of your loyalty program comes down to your priorities.  The more time and energy you invest in it, the more your customers will be able to see how much you value their commitment to your brand.  

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This includes putting the people and systems in place to help your program run smoothly.  Launch managers and a well-informed support team are especially helpful, but they’re not necessary!  No matter the size of your brand, your rewards program has the potential to elevate your customer experience above that of your competitors, making it a truly invaluable part of your brand that customers can’t wait to experience.

 

 

Bringing Customers Back

Keeping customers interested in your program doesn’t have to be a daunting task if you know what’s driving them away.  By readjusting and reassessing a couple of key areas in your program, you can easily bring your loyalty program back up to code and help your customers find additional value with each transaction.

So what are you waiting for?  Start improving your loyalty program today, and avoid being sentenced to a lifetime of customer churn.