Top loyalty program pain points to know before you press 'Go'

| by Dan Slavin
Top loyalty program pain points to know before you press 'Go'

As businesses look for ways to build closer relationships with customers, the use of loyalty programs can be an effective strategy. But it's important to find out what consumers really want in your program. 

Consider that 65 percent of people use less than half of the loyalty programs they've enrolled in. Likewise, 41 percent of those enrolled in numerous loyalty programs report using less than a fourth of those, according to the CodeBroker 2018 Shopper Loyalty survey involving 1,287 U.S. consumers.

These numbers point to the fact that you must know the problems people have with current loyalty programs before you can design one that is compelling enough to deliver value to your business and customers. 

It's critical that restaurateurs who want to tap into this potential revenue source know why so many current restaurant loyalty programs fail to really engage customers, and, more importantly, what you can 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 problems, according to our survey respondents, were: 
•    31 percent:     My rewards expired before I could use them.
•    23 percent:     Don't know when I have rewards available.
•    14 percent:     Carrying the card.
•    13 percent:     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 the quantity of 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 percent of respondents was the fact that they can't do it easily from their mobile devices. 

For instance, people preferred not to have to install a new mobile app. And 46 percent of those surveyed said requiring them to log in to a website was a step too far. In short, when obstacles stand between a customer and their rewards, there's a good chance they won't use the rewards.  

The task of prompting customers to try new apps is also tough. According to comScore's annual U.S. Mobile Apps Report, most loyalty app users said the app they use most often accounts for half of all the time they spend 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 most U.S. consumers now don't download any apps monthly. 

Most customers today have smartphones, so shifting from loyalty card to loyalty app is an obvious win. But it's not enough. Restaurant brands must also make their loyalty apps friction-less. So, for instance, requiring customers to download and install an app or remember their loyalty cards at the point of sale is now simply too big of an obstacle for people to overcome in store.  

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

Preferences for communications were slightly different, with 42 percent preferring email and 32 percent wanting text messages. Likewise, 15 percent preferred a mobile app, while 2 percent opted for 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 these 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 on each member's preferred channel. 

The personal touch can go a long way towards building a long lasting and mutually beneficial relationship. 

Photo: iStock

Topics: Back Office, Business Strategy and Profitability, Communications, Customer Service / Experience, Franchising & Growth, Loyalty Programs, Marketing, Marketing / Branding / Promotion, Online / Mobile / Social, Operations Management, PCI Compliance, Systems / Technology

Companies: CodeBroker

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