5 Mistakes You DON’T Want Your Customer Loyalty Program to Make


In today’s crowded e-commerce landscape, having a robust, data-driven customer loyalty program is no longer a “nice to have,” it’s a MUST. And if you don’t have a program, it’s time to launch one.

A customer loyalty program is a great asset to your retail business, boosting customer retention and acquiring new customers. One of the biggest aspects for any retailer is if the program’s return on investment is maximized as a customer loyalty program is a major investment. But it’s not just a cash investment, it’s an investment into customer experience. Cancelling a customer loyalty program or changing loyalty platforms in a short period can hurt your customer’s experience.

When customers visit your business, they are expecting a similar experience each time, whether it be a physical store, website and/or mobile app. If you make sudden changes that hurt their experience, they are more likely to visit a competitor. To help you maximize your investment and customer experience, here are the top five mistakes retailers should avoid making.

1. Lack of data collection

How customer data is being collected and used is a major key for a customer loyalty program. But many retailers don’t give customer data the attention it needs. A customer loyalty program is not an out of box product. It should be customized to your customers. So, with that in mind, as your program matures, your program should continue to be customized. How can you customize your program without customer data?

The customer data a fully modern loyalty program MUST collect includes:

  • Contact information
  • Social media accounts
  • Age and gender
  • Purchase data
  • Marketing and sales campaign activity
  • Rewards earned and redeemed
  • Loyalty points earned

This data should be collected through your customer loyalty platform, one robust enough to both collect data and USE data to create a 360 single customer profile, like FiO’s Customer Loyalty Platform. The success of your program is dependent on data collection and using data to make enhancements. From an optics stand point alone, you don’t want to be another retailer to have a failed customer loyalty program.

2. Non-insightful data

Retailers are collecting non-insightful data through their customer loyalty platform. While their platform collects minimum data, such as socio-demographic information, it isn’t collecting key data points, including customer purchases, social media posts, marketing, and sales campaign activity. These data points help retailers enhance the customer experience, and utilize a modern, data-driven approach to maximizing customer engagement and loyalty. FiO’s Customer Loyalty Platform not only collects hundreds of useable customer data points, it also amplifies your ability to know and understand your customer.

Often the biggest reason why a loyalty platform doesn’t collect this data is because the platform isn’t integrated with your POS system and/or e-commerce website you’re using. As a result, it’s difficult to collect these key data points. How can you create segmented campaigns, personalized experience or offer personalized gifts or purchase suggestions if you don’t know what how your customers are engaging? Hence, ensure that you are using a Customer Loyalty Platform like FiO’s to develop your customer data profiles.

3. Inaccurately segmenting customers

One of the benefits of a customer loyalty program is customer segmentation. Through your customer data, you can segment customers into groups, based off of gender, age, buying habits, and more. But the issue manyretailer face is inaccurate customer segmentation from a Customer Loyalty Platform that doesn’t have the capability to do advanced, data-driven segmentation.

The biggest reason for this mistake is related to the first two mistakes detailed in this article. Either retailers aren’t collecting the right data or the data they are collecting isn’t insightful because they have an insufficient Customer Loyalty Platform running their efforts. As a result, each customer in the loyalty program is receiving the same experience. And that is an issue. According to Forrester, 78 percent of customers are retracting loyalty faster than three years ago. One of the major reasons for this is due to customers not being segmented or segmented correctly.

To paint a picture for you, imagine if you are a 40-year-old man, working in construction. You recently received a high heel shoe campaign from a department store. Clearly this store doesn’t know anything about your preferences, so how can it be expected to accurately inform you on products you should consider for future purchase? You probably won’t visit them or their website, even though they sell your favorite brand of jeans. The department store lost you as customer, losing the chance to foster a long-term relationship. Had you been using a data-empowered Customer Loyalty Platform like FiO’s Customer Loyalty Platform

4. Communication errors

One thing customers signing up for a loyalty program understand is they are giving businesses permission to contact them via email and phone. But many retailers haven’t figured how best to communicate with them. Either they are contacting customers too much or they aren’t contacting them enough, both are issues.

If a retailer is contacting customers too much, customers will begin to disregard their messages. And if a retailer isn’t contacting them enough, then they aren’t maximizing their brand presence, which allows their competitors who have developed solid drip campaigns to benefit. Either way, retailers can’t create a segmented experience because customers aren’t engaging with any of their campaigns. Customers can be missing out on promotions and campaigns for their favorite products, reducing how often they return to the retailer’s store or website.

Therefore, having a loyalty program that can automate successful, cogent drip campaigns in essential. A customer loyalty program that does little to remind the customers of the value and they derive from your loyalty program.

5. Stagnant loyalty program

Loyalty programs need to be updated over time. Whether it’s the gamification you use, the program strategy or the points and rewards structure, it’s vital that the program be kept fresh to maintain client interest and customer engagement. But retailers seem to struggle making changes.

One major reason retailers are struggling to make changes is due to a lack of versatility in their loyalty platform. There are platforms that aren’t flexible for retailers, and as a result, retailers have a stagnant loyalty program. Choosing a platform that is flexible and is able to provide a sophisticated level of gamification and utilize AI like FiO’s Loyalty Platform is essential to avoid this mistake. Loyalty platforms like FiO’s can help you adapt your program as customers buying and engagement habits change.

Remember, a customer loyalty program is a great marketing tool to help increase customer retention and acquire new customers. But if you avoid these five mistakes, and invest in a dynamic, data-empowered Customer Loyalty Platform like Group FiO’s, you can expect your program to succeed.

Find out more about Group FiO’s superior Customer Loyalty Platform TODAY and discover how it can not only help you avoid common loyalty program mistakes but propel your Customer Loyalty programs to unprecedented retention numbers. Click Here to find out more.

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