How to Overcome Poor Loyalty Program Performance and Reengage Your Retail Members

Oct 22, 2013

The latest loyalty program data show a customer-engagement drop – despite expanding retail loyalty program membership – so evaluating the strength of your program has never been more urgent. It’s imperative to review poor performance indicators and take action to re-engage loyal members who are critical for revenue, especially in the run-up to the holidays, retailers’ busiest season.

My colleague, Kobie’s Vice President of Business Development & Marketing Bram Hechtkopf, and I will discuss this issue in our upcoming Loyalty 360-hosted webinar, Quick Tips: How to Overcome Poor Loyalty Program Performance and Reengage Your Retail Members, on Tuesday, October 29, 2013.

The “engagement conundrum” is twofold. While retail program membership rose 24% from 2010-2012, engagement is down 4.3% since 2010. And several retail sub-verticals including grocery, fuel and convenience stores and mass merchants have struggled with near-stagnant program membership and double-digit declines.

The reason behind the twin threat to these sub-verticals is clear. There’s a glut of rewards programs – the average American household is a member of 22 loyalty initiatives – but little differentiation. Loyalty has suffered because consumers are simply overwhelmed.

Here are some signs that a retail loyalty program is headed for an engagement drop-off:

  • Decreased customer spending
  • Product purchase shifts from luxury to necessity, for example free flights versus free magazines
  • Expensive single items replaced with several smaller products
  • Social media activity stops completely or becomes negative
  • Decreased in-store visits

New Priorities Require New Retail Customer Engagement Solutions

Solving these problems often comes down to the very nature of the brand’s loyalty programs. Have rewards or promotions become irrelevant? Have tiers or program goals become unattainable? Or are the rewards offered downright unbelievable?

Encouragingly, solutions to retail loyalty disengagement are diverse, but all are rooted in adopting an omnichannel loyalty framework and a customer-first approach. For instance, instead of focusing your efforts toward the middle or end of a campaign (where you risk customer attrition due to missed opportunities for connecting with customers), adopting omnichannel loyalty helps you better understand customer preferences early on – and meet members where they are, on their terms.

Omnichannel loyalty maximizes cross-channel marketing with an emphasis on driving cumulative outcomes—not through one campaign, but through ongoing campaigns that speak to individual customers and engage them with the brand. Its organic, intuitive, individualized and entertaining nature is the key to its success.

Tactics to Reengage Your Retail Customers

Gamification has also proven a highly-effective mechanism for customer re-engagement. Incorporating game-like elements into loyalty programs – points, badges, leaderboards or achievement levels – lets members earn smaller rewards when they’re between tiers. Gamification also increases social interaction between members, fostering a collective experience where everyone can feel rewarded.

Considering that roughly 20% of a retailer’s customer base accounts for 80% of its revenue, re-engaging the most loyal customers is critical for hitting revenue targets.

No doubt, retailers are experts at selling products. But the degree to which they market themselves through engaging loyalty programs is ready for improvement.

Retail Loyalty Programs Recharged, Reinvigorated and Renewed

Our webinar, which you can register for here, will help retailers ask those hard questions about their loyalty program’s health. We’ll challenge retailers to reverse low engagement levels and reinvigorate or rebuild their programs to help customers reach new levels of brand commitment.

When: Tuesday, October 29, 2013 at 1pm EDT

Where: Quick Tips: How to Overcome Poor Loyalty Program Performance and Reengage Your Retail Members