If you’re an entrepreneur or a marketer for whom loyalty matters a lot, then not running effective brand loyalty programs, channel loyalty programs, or influencer loyalty programs may sound like a bad idea. But you know what’s worse? Not being aware of the avoidable mistakes that waste all the time, effort, and resources invested in the programs.

Many businesses that have some sort of loyalty program make one or more deadly mistakes, which cause their loyalty programs to fail in the first few years. A recent study revealed more than three-quarters of loyalty programs fail in the first two years.

If you’re looking to launch new loyalty programs or revamp existing ones, you should know the main reasons why loyalty programs fail and avoid common mistakes. This blog post lists ten mistakes you must avoid if you’re planning to run or revamp your loyalty programs.

Avoid this Loyalty Program Mistakes

Here are 10 common loyalty program mistakes to avoid:

1. Creating loyalty programs without any definite purpose  

The biggest mistake any company can make is to run one or more types of loyalty programs with no clear vision or purpose of what they want from their loyalty programs. Some companies create loyalty programs by copying their competitors, while some create loyalty programs for the sake of it.

While creating or revamping a loyalty program, it’s extremely crucial to have a clear vision for the loyalty program as well as the objectives it must achieve. The best way, as Simon Sinek says, is to start with the “why.” Why the loyalty program is critical to your company? Apart from that, determine what purpose the loyalty program must achieve and how it will benefit your customers, stakeholders, and your brand.

2. Insufficient idea about customers, channel partners, and influencers

While creating loyalty programs for customers, channel partners, and influencers, you need to know everything about them. That’s why it’s extremely crucial to create customer personas if you’re creating loyalty programs for your customers and prospects. Likewise, it’s extremely necessary to know everything about your channel partners as well as key influencers in your industry before creating loyalty programs for them. An insufficient idea about customers will result in ineffective loyalty programs and not knowing relevant things about channel partners and influencers will lead to partnering with the wrong people.

3. Selecting the wrong loyalty provider

Another big mistake that many companies make while attempting to create a loyalty program is selecting the wrong loyalty solution provider. Choosing a loyalty provider is a strategic decision and you must handpick a partner, guide, and consultant with an owner mindset, who is willing to work closely with you and have their skin in the game.

Choose a loyalty solution provider that can create effective and tailored loyalty programs for you as well as allow you to integrate multiple loyalty programs into one platform. A reputable and trustworthy loyalty solution provider will also help you understand the mindset of your customer, channel partners, and influencers, and will create loyalty programs that resonate with the people they’re being created for.

4. Not focusing on transparency in loyalty programs

Loyalty fraud is a rising threat. A Forter Fraud Index report revealed that loyalty fraud increased by almost 90% on a year-on-year basis in 2021. Loyalty fraud is currently estimated at one billion dollars every year.

Many businesses make the big mistake of not focusing on transparency in their loyalty programs. By doing so they not only lose the trust and loyalty of their customers, channel partners, and influencers but also commit the crime of not giving the due loyalty points and rewards to the deserving party. The best way to prevent loyalty members from misappropriating reward points is to introduce a mechanism such as a dual wallet.

5. Being lax on a strong support system

Just as the quality of the loyalty software and the solution provider is important, the same goes for the support systems. Robust support plays a huge role in the well functioning of the loyalty programs. Many businesses, however, don’t focus on the support system while they create loyalty programs.

One of the greatest advantages of partnering with a reputable and trustworthy loyalty solution provider is that they can provide 24/7 support using multiple communication channels including instant messaging platforms such as WhatsApp. Apart from that, they provide real-time analytics and monitoring, a support tracker, QR status review, and more.

6. Not leveraging data effectively

Various studies have proven the importance of data for all areas of businesses. Data-driven loyalty programs are far more effective and successful than the ones that aren’t supported by data. Despite having relevant data and insights, many companies don’t leverage them to enhance their loyalty programs.

And, let’s be honest, not every entrepreneur or marketer needs to be great at analyzing enormous volumes of data and making data-driven decisions. This is where the role of a trustworthy loyalty solution provider becomes important. Partnering with the right loyalty provider can enable you to get key data of loyalty members such as their location and other demographic factors. Know the ways to leverage loyalty data to offer value propositions to customers.

7. Not customizing loyalty programs

A study conducted by Epsilon found that four out of every five customers are more likely to buy from a brand after receiving a personalized experience. Failing to customize loyalty programs makes the rewards irrelevant and inconsequential for customers. This is where knowing the mindset as well as taste and preference of customers, channel partners, and influencers proves to be extremely important.

Consider the interests and behaviours of your customers, channel partners, and influencers while crafting customized rewards. A trustworthy loyalty solution provider can help you create KPI-driven customized loyalty programs that are automated and scalable.

8. Not building strong rapport

Creating loyalty programs is one thing. But engaging and building a strong rapport with customers, channel partners, and influencers to run the loyalty programs is a completely different ball game. That’s where many businesses fail.

Organizing activities to engage stakeholders is the most important thing for the success of a loyalty program. When planning to revamp loyalty programs, focus on engaging activities to build a strong rapport with your customers, channel partners, and influencers.

9. Overcomplicating things

Many businesses overcomplicate their loyalty programs. Some make the enrolling process difficult. Some complicate the sign-up process. Some make it difficult to redeem points and rewards for their customers, channel partners, and influencers.

If you want to run effective loyalty programs, be extremely careful not to overcomplicate things. Make it easy for your customers, channel partners, and influencers to enrol. Don’t have too many restrictions. Make the sign-up process easy. Always think of the people for whom you’re creating the loyalty programs and make it smooth and easy for them to redeem loyalty points and rewards.

10. Not promoting loyalty programs and not evolving with time

Despite having well-crafted loyalty programs in place, some businesses don’t invest time and resources in promoting them. That lead to a massive waste of their time, efforts, and resources spent on their loyalty programs. Another big mistake that some businesses make is not evolving and changing their loyalty programs with time. Their loyalty programs become irrelevant and outdated and they’re unable to rival brands that offer similar loyalty programs.

Some things are better left to the experts. A professional and proficient loyalty solution provider will not only promote your loyalty programs but also change them as and when required.

The right time to evolve is now!

Let’s face it, a majority of businesses have some sort of loyalty program but how many of them succeed? Well, as per the available stats only a quarter of them. Some mistakes in loyalty programs can be extremely expensive for small businesses and if you’re planning to launch or revamp loyalty programs, then you need to be aware of the common mistakes that businesses make while running their loyalty programs.

At LoyaltyXpert, we have helped many businesses to run successful brand loyalty programs, channel loyalty programs, and influencer loyalty programs. We have also helped many companies in revamping their loyalty programs and eliminate their shortcomings. If you are considering creating or revamping loyalty programs for your business, book a demo today.