For many, loyalty is about much more than a programme; it’s a way of thinking about the entire customer experience and creating an environment where customers can forge deep and long-lasting relationships. Read our blog on The Complete Guide to Retail Loyalty Programs

It’s based on a sense of trust, on the expectation that companies will be responsible stewards of their personal data and use it to create personalized, meaningful and rewarding experiences.

Despite the continued growth in membership, only 42% of US consumers are actively engaging in their loyalty programmes.

 So how can we improve loyalty programmes to drive more engagement?

In truth, there are probably several different ways to improve loyalty programmes. Brandfire will address more ways over a series of blogs. But for the purpose of this blog, we are focusing on two factors.

  1. Rewards for a loyalty programme. Are actual rewards attractive enough and does it takes too long to earn those rewards?
  2. Marketers are spending too much time trying to recruit new members to their loyalty programmes and not enough time on those members that are already participating and engaging in their programmes.

Let’s look at both of these reasons in a bit more detail.

We’ll begin by looking at the reward and the reward rules. Choosing the right rewards for your loyalty programme is very important.

Very often, the customer has to do too much or wait too long for the reward.

The time it takes to be rewarded is consistently one of the most significant pain points for consumers. Getting to rewards faster, on the other hand, consistently persuades consumers to stay and spend. That’s according to Colloquy: Customer Loyalty in 2015 & Beyond.

According to this research, 75% highlighted the importance of relevance and rewards – “I get the rewards and offers that are relevant to me”.

Of course, the provision for rewards is a big investment for any company. Many supermarkets give one point for every € spent. This equates to giving 1% back to the consumer. So if your business has a turnover of €50 million, your rewards could cost up to €500,000.

There are lots of different and more cost effective ways to reward customers. For example, Brand Partnership leverages relationship with other brands or retail outlets by providing exclusive discounts or offers that really resonate with the customer. Examples of these types of rewards can be found with Three and

We will address rewards and reward rules in a future blog.

A loyalty programmes performance can be improve significantly by focusing on existing loyalty members.

Many marketers divide their loyalty investments evenly between member acquisition and member retention efforts.

The irony is that, for many years, loyalty programmes were hyper-focused on retention, but the pendulum has swung the other way in some cases, with companies aggressively pursuing new members.

According to an e-consultancy survey in 2014, 47% of marketers indicated they would spend equally on both groups; 34% would invest more in acquisition, while only 18% would spend more on retention.

Some programmes spend up to 75% of their time and money on new loyalty member acquisition.

Yet existing loyalty members are far more likely to spend more money, spend more frequently, try new products, refer potential new customers and contribute to profitability than new members.

Invesp Consulting says existing customers are 50% more likely to try new products and spend 31% more, compared to new customers.

This would suggest that using the acquisition budget on rewarding those members that are already engaged and businesses should see significant improvements on their investment.

So to conclude, we would suggest that the improvement in loyalty programme can be achieved by focusing on:

  1. Revisiting your rewards – are they exciting enough for your customers and attainable over a reasonable period of time?
  2. Spending more time with your existing members – nurture them, care for them and help them become your promoters.

Posted in Loyalty & Rewards