Blog

10 Common Loyalty Marketing Mistakes and How to Avoid Them

May 3, 2018 | Kathryn Clawson

Throughout my experience at AppCard, I have had the pleasure of working with a wide range of industries and clients on their loyalty programs. Some loyalty programs do well from day one, but some business owners struggle. In my experience, these are the 10 most common mistakes that businesses make with their loyalty programs.

1. Not holding cashiers responsible
retail-loyalty-mistakes-1

Cashier training should be your number one priority. Customers sign up for your loyalty program with your cashier upon checkout. Thus, if your cashiers are not trained on the program and are not actively promoting the benefits of joining, your loyalty program is destined to fail. Be sure to pay attention to employee transaction data in your loyalty program’s dashboard, and don’t be afraid to re-train your cashiers that aren’t enrolling customers, sometimes employees need an extra push. To help incentivize your staff, reward your cashiers that are doing a great job with a gift card or a free lunch.

2. Not setting goals
retail-loyalty-mistakes-2.gif

You have a loyalty program for a reason. Make it a point to identify the goals you’re trying to achieve. Do you want to increase your customers average ticket value? Do you want to push certain products? Do you want to increase number of visits? Whatever your goal, your loyalty provider should help you identify those goals and set forth a plan to achieve them. However, having a loyalty program without having clear goals and supporting metrics is setting yourself up for disappointment.

3. Giving away too much
retail-loyalty-mistakes-3

When you decided to get started with loyalty marketing, I’m sure one of your goals was not to go bankrupt. Before you introduce your program to your customers, be sure to evaluate your margins and make sure you are not losing money on your offerings. It is always easier to increase your offerings down the road than to decrease them and upset your customers.

4. Not giving away enough
retail-loyalty-mistakes-4-2

On average, how many visits do your customers have to make before they are able to redeem a reward? If you see your loyalty reach (the percentage of member transactions versus total transactions) start to dwindle, it may very well be because your customers are thinking “why bother?” If your rewards are unreachable for your average customer, you should reevaluate your program. Our data scientists have evaluated the top performing loyalty programs among AppCard businesses and have determined that customers see the most value in a program when they’re able to redeem a reward within their first 3 visits. This will show your customer the value of shopping in your store compared to a competitor.

5. Treating all customers the same
retail-loyalty-mistakes-5.gif

It doesn’t matter what kind of products you’re selling, you have different customer segments that are driven to buy from you for different reasons. If you have low loyalty participation rates, it very well could be related to a program that is catering to one segment of your customers. Making sure your points catalog and offers are diverse to entice all of your customers is a crucial step to maintaining a healthy loyalty reach.

6. Lacking customer engagement through in-store and social marketing
retail-loyalty-mistakes-6

Most campaigns that are not successful are simply due to a lack of customer knowledge. Did your customers know that if they purchased that brand of cereal they would get 10 bonus points? You might have sent out a text or an email campaign, but going the extra mile in-store and on social media will pay off. AppCard businesses have access to a graphic designer to help create signage to promote campaigns. Our graphic designer can even size the signage so you can post it on Facebook, Twitter, and Instagram. This way you will reach all customers on their favorite social channels and have in-store information for the customers who prefer to remain anonymous. You may even get a few new members enrolled to your program!

7. Never improving or changing your program
retail-loyalty-7.gif

Consistency has its perks when it comes to your customer’s knowledge on your loyalty program, but it can also be boring. I’m not saying you should completely change your loyalty program every month, but you certainly should utilize all of the capabilities of your loyalty marketing platform to reach your goals. Set up surprise offers every month to get your customers to try a new product, spend more, increase visits, etc. The possibilities are endless!

8. Not learning and growing from previous campaign and offer results
retail-loyalty-mistakes-8

Each time you send a new campaign or set up a new offer, you should always evaluate and learn from the customer response. Did you reach your goal? How could you make it more successful next time? By not doing this early on, you won’t know the best strategies to get your customers to respond when you need them to.

9. Treating Top Shoppers like all other customers
retail-loyalty-mistakes-9

In the grocery industry, specifically, we have found that typically Top Shoppers make up only 4% of the total shoppers in your store, but are responsible for over 75% of the total revenue. Identifying your Top Shopper segment and giving them exclusive offers and rewards will not only keep them happy, but will also encourage your other shoppers to spend more to achieve the status. Another stat to consider, is that it takes 10 new shoppers to gain back the lost revenue of one lost Top Shopper.

10. Making it complicated
retail-loyalty-mistakes-10.gif

Don’t make your customers feel like they have to complete an obstacle course to join your program and stay involved. Keep your lines moving by simplifying the enrollment process. The less information you require, like just a phone number for example, the more likely customers will be to join.  Simplify the earning structure and redemption options so customers know what to expect. The simpler the program, the happier your customers and cashiers will be.

Here at AppCard, we’re loyalty marketing experts and have worked with thousands of retailers, QSRs, and grocers to launch their loyalty programs. Get in touch today to learn how you can get started with loyalty marketing at your business!

button-schedule-demo

About Kathryn Clawson

Kathryn Clawson is a Senior Success Manager at AppCard and specializes in helping independent grocers grow their marketing and rewards platform using data-driven strategies. Clawson graduated from Kansas State University with a major in Marketing and a minor in Sales and Economics. For the majority of her career, she has focused on consumer marketing and sales within the agriculture and fashion industries. Clawson was raised on a farm in small town Kansas and now lives in Midtown New York City, where she enjoys learning from new experiences and having the luxury of eating a fresh slice of pizza at any hour.