Pitfalls of Loyalty Marketing - Why Retailers are Losing Millions


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Gone are the glory days where customers would eagerly rip open their latest loyalty program offers and cash them in at the store. These programs were reliable ways to keep retail sales thriving and maintain an additional, steady stream of revenue.
 
Then things changed. Now, most rewards are left unclaimed, coupons expired and many customers unaware that they were entitled to these offers in the first place. This all leaves billion dollar loyalty program investments without much to show for them.
 
So why the sharp shift? First, it's increasingly difficult to capture customer attention. Most consumers belong to more than 10 programs each, getting bombarded by new deals and sales almost every day, making it nearly impossible for them pay attention to everything.
 
Secondly, today’s self-service customer revolution is changing how consumers prefer to receive their information. Direct mailings are a thing of the past. Today’s consumers are demanding information through email, text messaging, Facebook, Twitter and other social media channels. And it's not one-size-fits-all: Each customer carries their own different set of preferences.
 
Through this, retailers are struggling to adapt, falling prey to the following series of pitfalls that's killing their program ROI, loosening their brand and taking the "loyal" out of loyalty:
 
Relying on one form of communication: Social media is moving customer communication away from a cookie-cutter approach, where everyone wants it the same way. Today’s breed of customers are becoming more individualized, looking for new ways to receive information. Studies show that using multiple forms of communication can result in a three-fold increase in program redemption over strategies using just one channel. This can translate into millions of dollars.

   
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