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What’s wrong with today’s loyalty rewards programs?

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What’s wrong with today’s loyalty rewards programs?
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Accepted wisdom states the main goal of a loyalty program is to create value for consumers, in turn encouraging them to become repeat customers and spread positive feedback about their shopping experience. A new report by Bond Brand Loyalty supported this point-of-view, finding that “73 percent of consumers are more likely to recommend brands with good loyalty programs, which equates to a boost in member acquisition and reduced marketing spend.”

Through this research, Bond also floated the idea that brands are missing a great opportunity to optimize customer loyalty and increase sales as result of a major disconnect between consumers and brands.

According to Bond, the lack of employee training and overall performance of associates is to blame. Bond reported that “Consumers belong to an average of 13.4 loyalty programs, but are active in only 6.7 programs.” Reward programs with high levels of inactive members are most likely lacking two important things: worthwhile incentives and human interaction.

Often, when it’s time to check out, most employees won’t acknowledge the customer as an enrolled member of their program. The risk of overlooking the opportunity to say “thank you” is accentuated when the most loyal of customers are ignored.

Bond Brand Loyalty made a few suggestions to make customers feel more comfortable, welcomed and valued:

  • If a customer isn’t a member already, be sure to invite them to join your loyalty program.
  • To please those signing up on the spot, make sure that the signup process is as friction-free as possible.
  • Make customers feel welcome even if it’s not their first visit, i.e., ask if they have any questions about how the program works.
  • Highlight savings on the customer’s receipt to reinforce the value of the loyalty program.
  • Where possible, always address the customer with their real name to personalize the transaction.
  • Train employees to simply say, “thank you.”

The loyalty industry has blossomed into a highly competitive space and is a marketing strategy that may be a retailer’s best hope to differentiate among competitors in a market where many consumers increasingly shop based on location and price.

In the past, local merchants leveraged personal relationships to encourage repeat behavior, but the task is more difficult today as populations change. Today’s most effective tool to create those connections can be realized through staff education about the retailer’s loyalty program and incentives to encourage their active advocacy of the program.

Photo Credit: Joe The Goat Farmer How to Make Consumers Have Confidence In Local Business via photopin (license)

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