Do your customers have loyalty program fatigue? 5 tips to spruce up your loyalty program
Have you heard from your customers recently? Whether it’s radio silence or feedback, skilled marketers can read between the lines and determine if their strategies are actually resonating.
More often than not, customers won’t blatantly come out and say, “This loyalty program doesn’t interest me.” If it doesn’t engage with them effectively, they’re not likely to offer any feedback in the first place– your customers may have already moved on.
Herein lies a common detractor from quality marketing strategies: loyalty program fatigue. This occurs when so many company loyalty programs look and feel so identical, none stand out or excite. As of 2022, U.S. consumers belong to 16.6 loyalty programs on average but actively use less than half of those. It can also develop when the customer journey and associated rewards along the way aren’t compelling enough. Or perhaps the system is just too complicated for customers to navigate.
The catch is: if they’re not directly giving you this feedback, but your engagement metrics are low, you may have a case of loyalty program fatigue on your hands.
So here’s how you can interpret the signs and determine whether your customers may have loyalty program fatigue:
Sign 1) Low KPIs and engagement numbers
As always, look at the data first. Especially with a volatile economic landscape, every company can have off-months. Loyalty programs, when executed well, can help reduce churn and retain customers for the long-haul, even during hard times. However, if numbers are still low after a quarter, or multiple in a row– then there may be a problem.
Sign 2) Lack of reward redemption
As of 2020, consumers have accumulated $48 trillion of unspent loyalty points globally (Wise Marketer, 2020). Nearly half– 45 percent– of loyalty program accounts are considered inactive, with consumers not tracking or redeeming points (Wise Marketer, 2020).
Customers join loyalty programs primarily for the reward incentives. So if they’re not redeeming their rewards, they may not consider them valuable enough. Don’t let your rewards waste away (along with your customer engagement). Give them a reason to get excited with rewards that matter.
Sign 3) Lack of customer feedback, or worse: high customer complaints
It’s safe to say that if your customers are talking about your program online or sending you direct feedback on it, then they care. They’re engaged, interested and want to excel with it– even if it requires improvement on your end. However, if you barely hear anything from your customers via your support center or social media (good or bad), then they simply might not be interested in the first place.
On the flip side, if you’re receiving a high volume of customer complaints (not just constructive feedback), then your customers may be fed up. Listen to their requests, implement what you can in the quickest timeline possible, and get creative.
If your company is seeing any of the above, then it may be time to spruce up your loyalty program. Here are 5 tips on advancing a program for the modern age:
Tip 1) Switch from transactional to emotional
Traditional loyalty programs rely on repeat transactions, but this does not generate authentic loyalty. Developing an emotional bond with your customers is key to forming a relationship that lasts. Provide them support that goes above and beyond what they expect, and they’ll return the favor exponentially.
Tip 2) Utilize data to improve personalization
Whether first-party or partner analytics, data can (and should) be applied to personalize your users’ experiences and guide them further down the customer journey. In today’s modern age, customers expect this. Make every interaction with them count, and they’ll reward you for it.
Tip 3) Fuse seamless omnichannel integration into your customer journey
After two years of interacting with companies mainly online, customers are ready to merge their experiences back in-person– but this hybrid approach must be accomplished tactfully. Develop an omnichannel system that tracks your customer’s interactions in-person and online, so you can deliver the full service they expect.
Tip 4) Try gamification to boost the incentives
Is your loyalty program fun or just the run-of-the-mill? Incorporate challenges and games to the experience, with some added prizes for those who jump in. Sometimes the best cure for loyalty program fatigue is excitement.
Tip 5) Give a reward that matters
89 percent of Bumped users think stock ownership is more exciting than traditional rewards (e.g., points, cash-back). Beyond that, customers who become shareholders increase their spending with the brands they own by 40 percent or more.
Incorporating unique reward mechanisms into your loyalty program, such as stock, can inherently bolster engagement, excitement and motivation. This gives customers a reason to play into your program that they can fully get behind– because they see the value for them, too.
Apply these 5 tips to combat loyalty program fatigue, and you’ll likely see an engagement uptick.