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How to know it’s time to update your Loyalty Program

As of 2020, two-thirds of consumers say their loyalty is more difficult for companies to maintain than ever before, while 67% are not satisfied with traditional loyalty programs.

Many loyalty programs are forged by brands and banks as if it’s just an asset to simply acquire and implement, rather than upkeep and adapt. In reality, loyalty programs are an effective means of developing purposeful relationships with your customers– and they should evolve as often as your audience does.

Here are 10 flags to help you identify if your loyalty program might need a refresh:

  1. Customers aren’t aware of your loyalty program

Most loyalty programs reach fewer than 5% of consumers. If membership numbers are low, first do an audit of your outreach and promotions.

Is it obvious that your company offers a loyalty program, or is it hidden behind complicated user navigation? How often do you remind your customers that this is an option for them? Is it easy for anyone to understand in a minute or less what the benefits are? If this isn’t clear, it’s time for a refresh.

  1. Customers aren’t joining when they are invited

So you’ve informed your customers of the program, but acquisition rates are still low. This could be for a number of reasons, but primarily, we can assume that the rewards and benefits are failing to entice customers to sign up.

Offer an upfront incentive for registering, perhaps a perk that they can receive or redeem the same-day or for their next transaction.

  1. New members are active at first, but engagement dwindles with time

Acquiring is only step one. From there, retention and active engagement is key to continue driving the program’s value.

Keep your loyalty program exciting with surprises, gamification, and easy ways to earn.

  1. Customers aren’t redeeming or finding value in their rewards

Consumers typically only redeem 30-40% of their reward balances in any given year. Even moreso, unclaimed loyalty points have been estimated to be as high as $100 billion.

Metrics and surveys will reveal whether customers consider your rewards valuable or worth their time. If they don’t, their loyalty is likely fleeting and easily spent elsewhere.

Complete market research to understand what your customers actually want, then do what you can to make it happen.

  1. Rewards are too troublesome to earn

To be clear, rewards should be granted for appropriate actions. To simply give rewards away for free can dilute the value and success of your overall program. The issue lies therein when customers are hindered from actually engaging in and benefitting from the program.

Try introducing incremental rewards along the customer journey, like bread crumbs to get the cake. Alternatively, you can increase the value of the reward and make the challenge more worth it. Loyalty programs work when the customer feels they’re getting a good deal– don’t skimp on them!

  1. Your loyalty program still uses a physical card

79% of Americans are more likely to join a rewards program that doesn’t require them to carry a physical card. Punch and loyalty cards may have been accessible and easy in the past, but in the rapidly digitized world, programs that are automatically linked to cards, apps and accounts are becoming increasingly favored.

Need support making the transition to digital? Partner with a tech loyalty company that can help. It is more  simple, quick and easy than you might think.

  1. Data isn’t being utilized effectively to personalize and target

70% of survey respondents say they would exclusively shop with retailers and brands that “personally understand them.” Unfortunately, many brands are unable to make personalized, targeted offers to their customers because they are not yet harnessing their data effectively. In 2019, the number one reason why loyalty programs failed was poor use of data. Don’t let your company fall victim!

Utilize your customer communication methods (eg. emails, social media, surveys etc.) to ask your customers their preferences. Get their consent to track their data, and invest in high-security encryption to keep it safe and retain their trust. Applying that data towards personalized marketing offers will advance buy-through action.

  1. Your aren’t considering new and innovative currency beyond traditional rewards

It’s important that you are always taking into consideration what your existing and new customers are looking for out of loyalty programs and memberships. 

We surveyed Bumped users and found that 89% think ownership is more exciting than traditional rewards such as points, cash-back, and air miles. Are you and your team exploring new reward currency options such as crypto or stock rewards? 

  1. Your long-term customers or customers of diverse demographics are disappointed

If your most loyal, long-term customers have complaints, then you know you have a problem. It’s unfortunately too common for longer-lasting customers to feel unappreciated, especially when newer members are given similar or heftier perks on shorter timeframes. These are your “day one’s”, so-to-speak. Treat them like it, and thank them for sticking with you for so long!

At the same time, an important question to consider is whether your loyalty program is serving all your customers equally. Watch for assumptions: is your loyalty program inherently geared toward certain levels of expenditures, or primarily popular in urban cities versus rural? It’s certainly strategic to have a target market, but make sure you’re not leaving any of your other valuable customers behind simply because they are of a different background or income.

  1. The ROI isn’t there

Nothing’s worse than investing in a loyalty program to not generate the revenue for it to make sense– or worse, be more costly than profitable. In this case, the program likely requires an entire overhaul of how it is structured.

Partner with the experts that know loyalty best. Your program should feel less like a burden, and more like a reward for you, too.

Is it time to update your loyalty program?

If any of these flags sounded familiar to you, it may just be time to rethink and revitalize your current loyalty program. Rewarding your customers in stock has been found to increase average customer monthly spend by 43% and program ROI by 23x. 


Interested in learning more about stock rewards as part of your loyalty program? Send us a message at hello@bumped.com.

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