Why Your Customer Loyalty Program Will Likely Fail
Tue Mar 23 2021
Coffee & cornetto
Having a customer loyalty program is very important to the success of a retail business.
On average, an amazing 84% of consumers say they are loyal to a specific retailer, and you want that kind of repeat business and retention for your boutique.
A rewards program can help customers stick with you even if you have price increases or strong competition. Unfortunately, many loyalty programs fail to get the results a store is looking for. Given that you invest significantly in the customer rewards and administration of the program, that can mean a big loss for your small business.
It’s important to understand why many loyalty programs fail and how to avoid the same fate for your boutique. Here are the reasons for failure and how to prevent them.
The Loyalty Program is Too Hard to Use
A loyalty program that’s too complex, or requires too much spending for rewards, will fail to hook your customers. It must be clear at a glance what the rewards process is and what the customer can expect to earn.
It should also be easy to sign up for your rewards program. Allowing customers multiple avenues to enroll, such as an in-store form and your company website, can increase participation. However, if the form requires too much information or the enrollment is hard to find online, people won’t sign up.
The unfortunate truth is that if your loyalty program is too hard to use, customers will move to a competitor that offers a simpler process. If you want better competition in the market, make your program easy to use.
You Don’t Promote Your Rewards Program
Obviously, no one signs up for a program they don’t know about. It’s important that your staff share the benefits of the loyalty program with every customer they serve. It’s part of excellent customer service and it will help your customers feel good about shopping with you.
You can also promote your program online, through your website and social media. When the loyalty program is highly visible and easy to sign up for, you’ll have a lot of customers join. In fact, you may attract new buyers who are curious about your program and willing to try out your shop to earn rewards.
The Program Doesn’t Offer a Personalized Experience
If you’re wondering what is customer loyalty and why it will likely fail, one of the reasons is that programs are often too generic. Today’s technology allows retailers to offer a more personalized in-store experience and reward program than ever before. In the past a store might simply have counted dollar purchases and given coupons as a reward, but that’s not enough today.
Consumers want to feel like they are known and their needs are understood. That means suggesting products to them based on previous purchases, offering tailored rewards, and more. This strengthens the customer’s connection to your store and makes them more likely to stick with you.
Create a program that offers perks based on activity — such as free shipping for those who frequently shop online, or a BOGO deal for those who buy multiple of the same products. You can also customize your loyalty program by offering birthday coupons and a bonus “thank you” discount on the anniversary of them joining the program.
The Benefits Aren’t Significant Enough
Different rewards programs will need to offer different benefits. A B2B customer loyalty program will look different than the one you design for your boutique. What they have in common is that the rewards need to be significant to the customer.
The best programs have both financial and non-financial rewards. For example, you might offer discounts for a specific volume of purchases, but you might also have a members-only section of your website where they can view new products before they are released to the general public.
As you structure these benefits, make sure they match what your customers really want. Take surveys of rewards members on a regular basis so that you can adjust the program if you’re missing the mark.
How to Prevent a Drop In Customer Loyalty
Your loyalty program needs to be designed with these common difficulties in mind so that you can avoid low participation rates, bad customer service, and a lack of loyalty among your customers.
By making the program easy to use, relevant to the customer’s buying behavior, and significant based on what customers are looking for, you’ll be able to prevent a drop-off in customer loyalty.
Make the earning process fun and engaging by offering a status bar each time a customer logs into their account. You can also offer surprise rewards to consumers even if they haven’t hit a benchmark yet. By keeping things exciting and showing customers how close they are to another reward, you can increase participation and loyalty.
If you’d like to learn more about running a successful clothing store, check out more of our blog today!