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The 3 Biggest Problems with Loyalty Programs Today

Jacob Brain


Now that we’re approaching the big retail season, it’s a good time to reflect on the state of the loyalty program industry. Some of the problems we see aren’t really new problems, which is concerning because that means new programs are coming to market with the same flawed thinking as in years past. This season, don’t let your loyalty program fall into these three big traps.

The “My” Loyalty Programs

In a very basic attempt to personalize the program, many companies brand the loyalty program with a “my”-company brand. We’ve written about this in detail in a past post, but the main mistake in this approach is that it’s brand personalization without real personalization of the program. Does the program really react and create personal offers, or is it just a weak attempt to bridge the gaps in the effectiveness of your program?

One-Size-Fits-All Loyalty Programs

This mistake exposes the lack of segmentation of your program. In an attempt to create one program for every customer, they throw proper segmentation out the window as an unneeded step in the process. Even if you have a inclusive loyalty program, you should still segment your program so you can track real behaviors and variation within participation.

Coupons as a Loyalty Driver

We’ve written and talked about this previously: Using Coupons to Kill Customer Loyalty, Never Discount Your Product, and Creating a Winning Loyalty Program. You can’t escape coupons in some cases, but the key is to not base your entire offer on coupons. Loyalty is not about giving away your product to those you know will buy it. Loyalty is deeper, it needs to have more value in the relationship than just the products and services. It is about who you are as a company. If you don’t build that in, you’re missing the boat.

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