The Biggest Roadblocks to Building a Top Loyalty Program

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As businesses look for ways to build closer relationships with customers, loyalty programs can be an effective strategy. But it’s important to find out what consumers really want. Consider that 65% of people engage with less than half of the loyalty programs to which they belong, and 41% engage with less than a quarter, according to the CodeBroker 2018 Shopper Loyalty survey. A total of 1,287 U.S. consumers participated in this revealing research.

Before you can design a compelling loyalty program that delivers value for the business and its customers, you must understand the gripes people have with current loyalty programs. Why are so many of them failing to engage their members? And, more importantly, what can you do about it?

What’s wrong with loyalty programs?

After talking to loyalty program managers, we know that increased competition is one of the reasons that engagement is down. There’s also a demand for better mobile access and a lack of understanding about the best way to contact members. But what do those members themselves have to say?

The top bugbears, according to our respondents, were as follows:

  • 31%       My rewards expired before I could use them
  • 23%       Don’t know when I have rewards available
  • 14%       Carrying the card
  • 13%       It’s hard to access my rewards information

Keeping people informed about reward status and expiration dates is vital. Without clear insights into rewards earned, engagement inevitably dwindles. Customers should be able to see what they’ve earned at a glance. If customers don’t know what points they’ve earned or when deals expire, it’s a sign that your communication strategy is too narrow.

Convenience is key, so the need to carry a physical card is bound to be a real turn-off. When a loyalty program is hard to use, it should come as no surprise that people stop using it.

Barriers to access

The top frustration associated with accessing rewards and points balances for 54% of respondents was the fact that they can’t do it easily from their mobile device.

People would prefer not to have to install a new mobile app. For 46% of people, the need to log in to a website was a step too far. When there are obstacles between a customer and their rewards, there’s a good chance the rewards will go unused.

Getting people to try new apps remains a tough sell. According to comScore’s annual U.S. Mobile Apps Report, the number-one most-used app accounts for half of user’s time spent on apps, with Google and Facebook taking the lion’s share. On average, people reach a saturation point at fewer than 20 apps. comScore’s conclusion is that a majority of U.S. consumers download zero apps per month.

It’s safe to assume that customers have a smartphone nowadays, but shifting from loyalty card to loyalty app isn’t enough on its own—you also need to make access frictionless. Forgetting a card or log in or having to download and install an app is simply too big of an obstacle for people to overcome in-store as they approach the point of sale.

What can companies do?

The good news is that businesses can easily take steps to mitigate these common gripes and offer a great user experience. Customers should be able to access loyalty programs on their smartphones, but you must also consider their channel preferences. There’s no one-size-fits-all approach.

In fact, the CodeBroker Loyalty Survey revealed:

  • 37% want to access rewards program info via a link in a text message
  • 28% prefer to use an app
  • 19% prefer a website on their computer
  • 13% prefer using digital wallets like Android Pay on their smartphone

Preferences for communications were slightly different, with 42% preferring email, 32% text message, 15% mobile app, and 2% Facebook Messenger.

If you want to boost engagement levels, it’s important to learn the communication method preferred by each loyalty program member. There’s an opportunity to collect some data here by offering a range of different sign-up options and taking note of which one each customer chooses.

Learning from the feedback

Insights like this present a tangible opportunity to learn and change your loyalty program for the better. Make sure that customers can see what points and rewards they’ve earned without making them jump through hoops. Make your system as transparent and frictionless as possible, and try to communicate via each member’s preferred channel. The personal touch can go a long way toward building a long-lasting and mutually beneficial relationship.

Dan Slavin is CEO and co-founder of CodeBroker, a provider of mobile marketing solutions. He was CEO of Framework Technologies, VP of Open Market, and CEO of International Testing Services. He earned a BS in Electrical Engineering from Yale and an MBA from Harvard. You can reach him at [email protected].