In 2015, Forrester Consulting released a study about satisfaction with loyalty programs in the US. The participants of the study weren’t just customers, but decision makers in businesses, too. The results were revealing. They suggested that many loyalty program decision makers don’t feel they are making the most of customer loyalty programs.

Much has been made of customer apathy around loyalty programs in recent years. But it seems customers aren’t alone in feeling disappointed. Surely if both merchants and consumers feel this way, something has to change.

As part of the Forrester study, 150 loyalty program decision makers in the US were asked about the types of behavior they were seeking to influence through their customer loyalty program. Nearly two-thirds cited purchase frequency as a key behavior to influence. However, only 1 in 5 felt they were completely successful in influencing this. Similarly, well over half the participants cited customer spend in general. But only 17% felt they were completely successful in influencing this spend. Over half also cited brand advocacy as a key factor. But again, only 1 in 5 felt they were completely successful in creating brand advocates. So what’s going wrong?

Perhaps customer loyalty programs simply haven’t evolved in the same way other business strategies have. The majority of companies carry out customer loyalty programs the same way they did 15 or 20 years ago.

It’s engaged customers that keep coming back

In the past, it might have made sense for individual companies to have their own, stand-alone loyalty programs. But not anymore. There are simply too many of them. Customers have been struggling to achieve largely unattainable rewards across dozens of programs because they just cannot spend enough money in each to reach interesting rewards. This has led to a situation where normal spenders are doubting if it is worth signing up in the first place; or even if they are already a member, whether it is worth identifying themselves at check-out.

This has caused many consumers to simply give up hope of making the most of customer loyalty programs.

It also helps to explain the low numbers of decision makers in the Forrester study rating their strategies as successful. Despite the best intentions of merchants, if the customer doesn’t see a clear way for them to benefit, they won’t participate. If this is bad news for the customer, it’s worse still for the merchant because they are not capturing data or maintaining an open communications channel with a great number of their customers.

Let’s re-visit the three measurements that these decision makers wanted to influence. Purchase frequency is clearly crucial for any business. You want the customer coming back regularly. But apathy doesn’t make customers eager to return. It’s engaged customers that come back often to spend at your store. As for customer spend, if the customer doesn’t value the loyalty currency, there is no incentive to allocate higher share of wallet. And what about brand advocacy? Converting loyal customers into brand advocates should be a long-term goal for every company. But without engagement it is hard to get the customer on the desired customer journey.

Making the most of customer loyalty programs means optimizing benefits for both customers and merchants

So what’s the answer? Perhaps unsurprisingly it’s about putting the customer first. Giving them a mix of things they really value so that engagement increases. Only engaged customers become loyal customers. And only loyal customers become brand advocates.

It’s time to think differently about customer loyalty. A lot of existing consumer apathy originates from a belief that they simply won’t achieve any kind of valuable reward. A global loyalty currency would solve this problem. Imagine how much more engaged the customer would be if they knew they could earn and redeem the same loyalty currency across a variety of brands. This global currency wouldn’t even need to be the primary loyalty currency offered. Offering a global currency as a secondary or alternative currency would still send a positive message and appeal to mid-tail and longer-tail customers that are also important to your business.

Making the most of customer loyalty programs means optimizing benefits for both customers and merchants. Currently there is a lack of satisfaction in both camps. Merchants need to ask themselves whether they’re offering customers something truly valuable.

If you would like to talk further, have any comments, or would like information about our universal loyalty currency, comcoin, please get in touch with us.