Can a loyalty program do more harm than good? It’s clear that well-executed retail loyalty programs can benefit retailers in many ways, including boosts to recency, frequency, and average ticket as well as a greater capture rate for consumer data. Consumers are often more willing to share their (accurate) contact information with a retailer in exchange for the benefits that often come with loyalty programs: discounts, free products or VIP services to name a few. It’s easy to see why more and more retailers see the value in loyalty programs: studies show that repeat customers spend 67% more than a new ones (BIA/Kelsey).

Sometimes, well-intentioned retailers create loyalty programs that just don’t deliver the results they expected. After all, the average U.S. household has signed up for 14.1 loyalty programs, but only participates in 6.2 of them (Hanover). To uncover the reasons why some loyalty programs are less successful than others, we’re looking at them from the consumer’s point of view. Below, we share some of the common pet peeves consumers report about retail loyalty programs.

Don’t Over-Complicate the Program

If you only read one point in this article, let this be it. Today’s consumers seek simplicity in every aspect of their lives, and especially when it comes to shopping. In today’s instant world, it’s critical that retailers make it easy to shop with them, and this concept should definitely extend to loyalty programs. In an effort to make rewards programs interesting and exciting, some retailers end up over-complicating them. Double points on the third Wednesday after the harvest moon! Buy any denim, t-shirt and 3 accessories and spend at least $100 before taxes, and get 5 bonus points! These are obvious exaggerations, but to consumers, many loyalty programs can be difficult to understand. Can a part-time cashier explain all the benefits? If your value propositions are vague, there’s a good chance your consumers won’t fully buy in to the program.

Don’t Make it Feel Like Work

Loyalty programs are a two-way street: sure, there are benefits for the consumer, but the benefits are earned. Consumers understand that there’s give-and-take with these programs, but it shouldn’t be so difficult to join and participate that it becomes a burden. Some things to look for include:

  • How simple are registration forms? Can consumers sign up with just a few clicks, or in less than 30 seconds at the point of sale?
  • Once registered, can consumers, especially your real brand advocates, easily manage their profile and preferences online?
  • Can shoppers do everything related to your brand with a single login? For example, many websites still require multiple logins for different areas (ex. sign in here for your shopper account, here for your gift registry, there for your loyalty account).
  • Do you offer a mobile app with a scannable card or card-free membership? Consumers are getting tired of carrying so many physical cards: can your scanners accept barcodes from a glossy smartphone screen, enabling consumers to use your mobile app, Passbook, or other mobile wally apps, such as Stocard?

Don’t Make it Easy to Forget

Having a loyalty program that isn’t alive and active in your stores can be worse than no program at all! Do your cashiers ask customers during every transaction if they are a rewards member? If not, this is a quick fix to implement, and it’s one that’s vitally important to the success of the program. Aside from encouraging regular participation, this small gesture also avoids the feeling of disappointment consumers experience when they complete a purchase, walk five feet away from the store, and realize that they’re missing out on rewards, because they forgot to present their points card. No retailer wants shoppers walking out of their stores feeling disappointed!

Don’t Make it Too Difficult to Redeem Rewards

While it’s important to protect your margins, it’s equally important that consumers see the value in joining retail rewards programs. For a program to be successful, consumers need to experience its benefits from time to time. Don’t make shoppers wait too long before they reap some benefit. This might mean that all members receive a benefit from the start, which can be as simple as an extended returns timeframe for members, or another experiential reward.

Don’t Forget to Use the Data

Lack of relevant messaging is a major problem for many retailers, and it’s even more inexcusable when communicating with loyalty program members. Consumers expect relevant communication and offers in exchange for the personal information they provide when they join a loyalty program. If shoppers take the time to participate in these programs, knowing that their purchases will be tracked to their profile, it’s important that retailers make use of this data to tailor relevant messages wherever possible: including e-mails, online storefronts, and in-store.

According to CapGemini, well-run loyalty programs can increase a company’s overall profitability by 20%. If you’re not obtaining the desired results from your current program, consider looking through the shopper’s eyes, and you may uncover some simple fixes that can deliver big rewards: both for the consumer, and for your bottom line!