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    4 Reasons Why Loyalty Programs Fail


    In industries like retail, travel, , and healthcare, there is a pressing need to engage customers through loyalty programs. According to a recent research, loyalty programs impact almost 80% of participating customers. Which means that if companies want to cut across brand clutter and beat commoditization, they must adopt proactive customer loyalty programs. But how can that really work and what would be the success benchmark for such a program?…

    On the flip side, it is estimated that a majority of loyalty programs are not appealing enough to the customers, due to one reason or the other. Some of the common failing grounds for loyalty programs are:

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    1.Lack of differentiation: With most loyalty programs sounding the same, customers are at loss to know why they should subscribe to a particular program and how it will benefit them more. A common loyalty program just means an additional card and addition of a few points to the account every time you shop. That’s all

    2.Absence of special privileges: The best example of feeling like a privileged customer comes from the Airlines. They offer swanky lounges, special check-ins, and other benefits to their loyal customers. However, a similar feeling is missing from most retail loyalty programs

    3.Want of personalization: Customers all the time prefer messages that are relevant to them. A recent study concluded that only about 5-10% people feel that the emails and text messages that they receive are relevant to them. Which means that stores must do more to understand what type of products the customer has purchased and thereby send relevant promotions only.

    4.Gaps in social media integration: Companies need to reward their customers for posting likes, comments, purchases, etc on their own Facebook accounts. Current loyalty programs hardly address this issue and fall short of capitalizing on the social networks of their own customers.

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