Loyalty’s Elusive Nature Not Illusive: Management Styles Matter Most

Jan 23, 2013

“Why Don’t Loyalty Programs Connect With Consumers?” That’s a question – and the title of a recent article on RetailWire that confounds many loyalty program managers.

In the article, Edgell Knowledge Network (EKN)’s State of the Industry Research Series: Customer Loyalty in Retail report found that despite continuing efforts by marketers and loyalty providers, loyalty programs still have trouble establishing genuine connections with their members:

  • While 32% of respondents plan to launch a loyalty program in the next year, that growth comes with the knowledge that 81% of loyalty program members don’t understand program specifics.
  • Worse still, at least when it comes to retailers, is that loyalty program membership doesn’t guarantee heightened brand loyalty.

The article’s final recommendation for improving loyalty teases at the idea that “internal political equations” are preventing loyalty program efficiency.

To me, “internal political equations” sounds a lot like code for brands’ need to improve their internal communications, reduce corporate siloing and upgrade their customer experience management approach. What that means is a better integration of loyalty programs with existing customer relationship management systems. And this is an exciting topic (CEM) that we’ll be covering extensively at Kobie in an upcoming whitepaper, just as we have in recent blogs.

Loyalty’s elusive nature might not be an illusion, but there’s no reason why it should remain in that state – especially considering that the average consumer is a member of 18 loyalty programs. That alone suggests consumers are very interested in what brands have to say and how they deliver experience-driven rewards.

If management styles caught up to where consumers already are, the loyalty program disconnect would be solved. The good news is that they can!