11 December 2017

3 reasons why customers leave the loyalty program

It has been known for a long time that maintaining regular customers requires less effort and costs than acquiring new ones. It is estimated that actions targeted at potential clients cost the brand up to 7 times more than those focused on building loyalty. Therefore, maintenance of relations with existing clients should be a key element of any business strategy. In the meantime, it turns out that loyalty programs not always fulfill their role. Why is this so?

There is no doubt about the effectiveness of a loyalty program as a method of building loyalty. The reason for inefficiency is usually the use of templates that have long been out of use. The world is changing, bringing new trends that are the result of new expectations, including customers. Therefore, the effectiveness of a loyalty program is determined by its adjustment to the present times. So what should one avoid?

1. Common patterns

The  current perception of the customer only as a buyer of products and services is incorrect, and is why loyalty programs are improperly constructed. Although 35% of customers make purchases anyway  thanks to these programs, as many as 43% of the buyersemphasize that an important aspect of participation isgamification, interactive games and entertainment. If the strategy is deprived of these aspects, sooner or later participants will quit the loyalty program. According to the results of the ARC Rynek i Opinia survey, customer loyalty is strengthened by all non-standard activities going beyond patterns that have long been outdated.

2. Group approach

Customers are bored not only with repetitive forms of loyalty programs but also the lack of personalized communication. They will not stick to the brand when in exchange for collected points they often receive random rewards, which are disproportionate to the degree of engagement and unmatched to their needs. The reason for customers leaving the brand is the lack of individual treatment. If the client does not feel distinguished in any way, he will not be motivated to be active. Unfortunately, there are still loyalty programs directed to groups, without considering individual needs of the members.

3. Customer ignorance

Ignorance is a frequent cause of various problems, including those related to the low effectiveness of a loyalty program. The lack of knowledge about the client prevents the personalization – the key to any type of loyalty, whichalso brings emotions and building positive experiences - something that strongly determines the choice of the brand. The lack of these aspects in a loyalty strategy often results in the participant's resignation from the loyalty program and the disappointed customer walks away from the brand.

Keep the clients!

In most cases it is possible to keep the customer. To prevent him from leaving, however, one has to respond quickly to any disturbing signals. And these always appear when the client is considering leaving the loyalty program and switching to the competition. The decision should be made when one can still make changes to the strategy and prevent the client from quiting.