What To Do When Your Loyalty Program Is Failing To Meet Its KPIs
Have you recently invested a significant amount of money and effort into a loyalty program, only to find that you are not meeting any of your KPIs? Launching a loyalty program is an exciting time and you are eager to hit those KPIs your team has established.
So it’s understandably frustrating if you start to see performance issues or the program starts failing to hit certain Key-Performance Indicators (KPIs). Understanding the underlying reasons for these shortcomings is crucial to implementing effective solutions. Whether it's through refining program offerings, enhancing customer engagement, or leveraging data analytics, there are strategic steps you can take to revitalize a struggling loyalty program and align it with your business goals.
Here we'll explore 5 reasons why your loyalty program may be failing to meet its KPIs, how to to identify the issues at play, and the actionable strategies you can use to fix them. It is important to remember that there isn’t only one solution to these problems. Many of these changes can fix multiple problems you are running into. Doing so can turn your loyalty program into a powerful tool that boosts customer retention and satisfaction.
You Don't Have A Strategic Plan With Clear Short-Term and Long-Term Goals
When you are setting up your customer loyalty program's goals and objectives you are probably focusing on primarily long-term goals. But planning out short-term goals is just as crucial.
Your brand needs to start with the question, “What do we want from this program?” and that will help you decide what fits into the short-term goals category and what belongs in the long-term category. It's crucial to have a balance of the two goal types and not overly prioritize one or the other. If you are solely focused on the long-term then you can miss small milestones that should be highlighted. If your loyalty program is hyper-focused on boosting short-term transactional metrics like sales or discounts then you are missing an opportunity to build strong customer relationships.
A lack of goals can result in putting resources into unnecessary areas, or vice versa, not putting resources in necessary areas. Because there is no clear understanding of where investments are needed, you are unaware of what is needed for your loyalty program's success.
How To Fix It
The first step to fixing this problem is clearly defining your short-term goals that will align with your overall loyalty program objectives. Determine what you want to achieve in the first 30/60/90 days, 6 months, year, etc. This plays into your customer journey and defines what member engagement you want to see.
As you reach these milestones take a look at what objectives you have reached and which ones you haven’t. This will allow you to look at where you are putting your focus and allow you to make changes accordingly.
2. Your Enrollment Strategy Isn't Driving Initial Engagement
If you are promoting your loyalty program and getting customers to sign up but then immediately leaving them to fend for themselves, that could be a large factor in why your program is struggling.
An ongoing engagement strategy post-enrollment can be easily overlooked but it is a critical component of a successful loyalty program. During the enrollment phase of a customer's journey, various factors may contribute to members either failing to complete their enrollment or disengaging shortly after signing up.
How To Fix It
Your enrollment strategy should start before the member has begun the sign-up process. You need to hone in on your target audience and create effective messaging that clearly conveys the core values of the program and how becoming a member will benefit their everyday life. Offering attractive perks like discounts, personalized rewards, and early access can motivate customers to join and stay active in a loyalty program in the crucial post-enrollment period after sign-up.
Making the enrollment process seamless helps potential participants join easily, making it more likely for them to get involved and stay active on your platform. Enhancing and broadening your enrollment strategies allows brands to revive their loyalty programs and build stronger connections with their customer base.
Why Members Are Not Completing Their Enrollment Or Disengage After Signing Up
Overcomplicated Sign-Up Process
Signing up for anything can quickly become more trouble than it’s worth in the eyes of the customer. It’s important that you make the sign-up process as simple as possible to ensure they don’t give up in the middle of it. Get the basic information that you need and then allow them to provide more detailed information at a later date.
Your UX Is Hard To Understand
Your customer loyalty program's design plays a big role in how invested a member will become in your program. If they see that your UX is difficult to understand and navigate, it can cause frustration and a rise in customer churn. A successful loyalty program does not require a complicated design; you want customers to be able to easily log in, view their account dashboards, navigate the platform, and so on. Keeping the UX simple opens opportunities to incorporate more personalized touch points and an overall more enjoyable and engaging experience with your program.
Customers Don’t See Your Program Value
People aren’t willing to give out their information to a company if they don’t see how it will benefit them. Your promotional messaging should give them enough information to draw them in enough that they see the value your loyalty program can provide to them.
Lack of Promotion
A lack of promotion after launching is one of the top reasons a loyalty program could fail. The enrollment stage is a critical point in engaging with customers and encouraging them to become active on your platform. Without effective promotion, the opportunity to showcase the benefits and rewards of your loyalty program is gone.
3. Your Rewards Aren't Encouraging Repeat Behavior Or Aren't Being Promoted Correctly
Your loyalty program’s rewards catalog can be one of your program’s largest differentiators over your other competitors. However, if you are offering rewards that don’t bring real value to your members then there is no reason for them to continue to make purchases and earn points only to not redeem them. Members are less likely to participate in your loyalty program if they don’t feel they are receiving real value in exchange for their time and effort.
Desirable loyalty program rewards can drive excitement, and urgency, and create the feeling of exclusivity customers love. However, outdated, limited, or generic program rewards will lack the ability to do any of the above. This can lead to low program engagement and eventual customer churn.
If you provide highly desirable rewards but are not achieving optimal redemption rates, consider how these rewards are showcased on your loyalty platform. For instance, if your most popular item is buried on the 4th page of your rewards catalog, your members are probably unaware of its availability.
In a saturated market, brands with loyalty programs must promote their rewards effectively and communicate with customers to remain competitive. Inadequate promotion diminishes the perceived value of your program to customers, reducing their engagement levels.
How To Fix It
Start with ensuring your catalog is updated with relevant and valuable rewards. Look at which rewards are highly sought after or redeemed most frequently and bring them to the top of your catalog.
To build brand loyalty and brand trust you have to build a connection with your customers based on their interests. Experience-based rewards are a great way to do that. They can get excited about an opportunity they might not have purchased themselves and that will reflect highly on your brand. Personalized rewards and experiences create an emotional bond between your brand and customers that will keep them coming back.
4. You Aren't Utilizing Your Loyalty Program Data Effectively
Having the ability to track and monitor your customers' data is one of the best tools to see your loyalty program succeed. Failing to leverage your captured data means you are missing out on the opportunity to create personalized communication and experiences for your customers.
Without utilizing this data you aren’t able to accurately target your audience which leads to generic marketing and disengaged customers. This information impacts all aspects of your program and by ignoring these metrics your program can become outdated or irrelevant.
But let’s say you are tracking some of your customers' data and using that information and still are not seeing the results that you would like. Take a look at what exactly your KPIs are and see if you need to modify those.
How To Fix It
Addressing this issue can lead to enhancements in all aspects of your program. Evaluate the customer information you request and examine how your program leverages this data to improve their experience.
Precisely collecting data enables you to reach your audience across various platforms enriching their overall interaction with your brand. Data plays a crucial role in personalizing your members' journey, making them feel understood and appreciated, and ultimately fostering increased brand trust and loyalty
5. Your Program Isn't Evolving and Innovating New Ways Of Engagement
As we mentioned before, trends change very quickly which means that people can lose interest in certain things just as easily. If your program hasn’t changed in 7 years there’s a high chance your members will eventually lose interest and disengage. Not only do trends change, but your customer’s expectations of what they can expect from your program also evolve. If your program fails to address their wants and needs, then they might turn to a program that can meet their expectations.
Without evolving, your loyalty program is not able to create positive memorable experiences with your members, and in return, you won't be able to build an emotional bond with them as well. People want to know they are getting the best of the best, and if your program isn’t adapting to the new technology that is being created then you are missing opportunities for enhancing their experience.
How To Fix It
It can seem daunting to make big changes to your program when it comes to the technology side. However, implementing the new technologies that are available to customers will boost your customer retention and customer engagement. Look into how you can integrate different social platforms into your program to encourage not only engagement but word-of-mouth marketing right from your members. This will allow your members to build a community outside of your program and broaden your target audience.
Conclusion
Not seeing success in your program can be defeating but that doesn’t mean you have to throw in the towel immediately. The first step is understanding where you can improve and knowing that each challenge presents an opportunity for improvement. By implementing these strategies you can fix the problems at hand and set yourself up for long-term success and customer engagement!
