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7 Sins of Loyalty Programs

Having loyalty program for your business might consider as an option to grow the business. Despite its power to retain your customer and make them spend more cash on your products, you need to take some notes before considering it as your strategy options. Here’s the seven sin of loyalty program that could cost you a lot.

  • Cost-centric
    Unless you have an unlimited budget to reward your customer, the program will drain your marketing budget. At some point, the customer sees it as a way to keep them spending on your product. So you need to spend more to keep them entertained.
  • Short lifespan
    People get bored quickly, so you need to spend more time to design a more creative and exciting. It is hard to create a campaign that lasts more than 3 months.
  • Un-personalized
    Since the program is designed for a massive audience, you can not give your customer a more personal experience. It is templated so not everybody will be exposed to the true value of the program.
  • One way communication
    A loyalty program is designed to communicate how much you value your customer, but not to listen what your audience had to say about your product. You might end up rewarding the wrong audience.
  • No clear attribution
    This is serious, you can not define which people who genuinely love your product, and who love the discount or benefit you have for the repeat customer. This will waste too much of your resources.
  • Huge investment
    To develop a great loyalty program nowadays, you need a set of people who will be dedicated to run it. You’ll also need to start investing in technology. This is a considerable investment, while you can’t predict a program without even running it first.
  • Un-scalable
    Since the heart of loyalty program is cost-centric, it is hard for you to acquire bigger market cause you’ll need to spend more budget on it. The burning rate could be very high.