6 Things that Can Get in the Way of Loyalty Program Success and How to Fix Them

Although running a loyalty program brings significant benefits, there are still a number of challenges that you need to solve to be able to make it a success. The LOYALTY MARKETING & REWARDS PROGRAMS – GLOBAL MARKET REPORT 2022 has identified the most important challenges of loyalty programs. In this article we reveal the top six, and recommend specific steps to overcome them.

The LOYALTY MARKETING & REWARDS PROGRAMS – GLOBAL MARKET REPORT 2022 is a commissioned study conducted by Forrester Consulting on behalf of Comarch, and is based on data collected from over 500 loyalty program decision-makers from four different regions. This makes it a realistic overview of the loyalty industry, providing information about what drives customer loyalty these days.

Download the full report here.

Here, we are focusing on one loyalty aspect – the most common problems you need to overcome to make your loyalty program a triumph. The situation looks different in the B2B and B2C models. In the first one, the top challenges include integration difficulties, whereas in the second one, they are internal resourcing/silos. Take a look at our summary.

Main obstacles for your loyalty program

1. Internal silos and staffing/resourcing

Organizational silos create major barriers to communication and innovation, and the majority of respondents report that they aren’t adequately supported by human and other resources when it comes to loyalty program management. Lacking sufficient means to share data and knowledge, especially in the face of unintegrated tools and communication processes, is a great challenge for teams developing and managing loyalty programs. 

2. Integration with existing technological stack 

Around a third of respondents want to integrate with their e-commerce, customer data platform, and ERP. However, there isn’t the compatibility to do so. It’s particularly interesting as – according to the report – technological integration is at the top of the shopping list for program decision-makers, even though it has not been adequately executed. 

3. Lack of knowledge on how to measure the effects of the program and its individual campaigns

There is a major problem with deciding on what KPIs should be measured (what’s more, what to expect from them) and what are the results of similar programs in these areas. The report reveals the lack of skills to report positive effects of individual campaigns based on loyalty promotions, as well as a total general change in behavior in the group of loyal customers.

4. Lack of access to data and analytical tools for loyalty data 

The data often end up in an organization-wide data warehouse without direct access to a marketer. As a result, quickly noticing and using any insights or signals that may arise in future activities becomes impossible.

5. Lack of personalization

Only 22% of retail programs currently have or will offer personalized offers. Furthermore, very few provide surveys and polls, which are a really useful way of checking the pulse among the customer base and establishing whether they are getting what they need from the brand and the program itself. Yet, as we see in other statistics of the report – this is one of the top aspects of loyalty that retailers plan to offer in the next five years. 

6. Misalignment between what customers want and what they get

Customers want a mix of financial and experiential rewards, but loyalty programs are mainly about cashback at the moment, and only 11% of brands reward a customer for referrals. Only 9% of B2B programs plan to offer some/more experiential rewards in the future. Programs must move beyond transaction-based schemes. For now, they aren’t particularly engaging, and they aren’t differentiating.

Ways to overcome these challenges

The question you probably want to ask now is – how can these challenges be solved? Luckily, we have some recommendations based on our clients’ success stories.

1. Simplify your marketing and technological ecosystem

Multiple tools from various vendors results in data silos, lack of integration between them, more manual work, and slower execution. A single platform that covers all of the loyalty marketing processes is able to solve all those issues.

2. Re-think your personalization strategy

Ask yourself these questions: what data do you collect (is your customer aware of this, and will you use the information efficiently)? How do you capture important details from your data? How do you turn them into well-targeted content (such as personalized offers)? And finally, how are your actions executed in your omnichannel environment?

3. Consider outsourcing 

Think about outsourcing the execution of loyalty marketing tactics to experts. Customer loyalty is still a niche domain, and resourcing is the main issue of program operators. In many cases, it can also be less expensive by eliminating errors in your program that can cost you the trust of your customers.

If you’d like us to help you to go through the above steps, visit our website. At Comarch, we offer a complete set of powerful loyalty management and digital marketing tools to increase customer lifetime value and improve your ROI.