Five reasons why companies fail to make loyal customers
Retail, Wholesale, Customer Experience, eCommerce, Loyalty, B2B, B2C

Many companies in the retail and wholesale industry strive to make loyal customers by releasing loyalty programs. In many cases they fail – even after significant investment. At Bluefort we continuously research customer experience updates and how to leverage technology can to bring cumbersome customer loyalty to the next level. It is no secret that when customers become more loyal, they purchase more – bring you more revenue at a lower cost of acquisition. Let’s review five reasons how your business from stronger customer loyalty strategies.

1. Blurry program

This is a core reason why many customers will not buy from you based on a loyalty program. We have seen retailers deploying loyalty programs that only work on at select stores, not at franchisers or e-commerce. Secondly, many programs are unclear about how to redeem rewards or the redemption process is even agitating . Imagine trying to be loyal, signing up, collecting rewards, and being told you can't redeem your hard-earned rewards or points. That is not rewarding loyalty; it is punishing your customers.

To roll out a clear loyalty program, create an easy enrolment process and clear earning and redemption. Make sure the rewards are worth the hassle of signing up. Get rid of points that expire after 6 months; this is exactly when you want someone to make another purchase. Make sure the customer can claim rewards at all physical and e-commerce locations and with ease. Use simple rules. Forgot complex, figure driven programs and get into the mind of your customers. A great experience for customers is to get easy access to how much the rewards they have earned and getting proactive insight into how they can claim or redeem their rewards. Lastly, you need technology to keep your customer experience fresh, data accurate, and lightning fast availability.

2. You are worried about the fraud risks

A loyalty program can be a target for fraud, and it is paramount to understand the possible security breaches to your loyalty program. The first aspect of fraud protection is to ensure your loyalty data is securely protected against inside and outside manipulation. For example, employees should never be able to change the loyalty data directly, but only by apply transactions to raise or lower the value for a customer. An approval workflow, where one employee changes the loyalty data, and another approves, or rejects can prevent internal manipulation. Your technology must be able to support such internal fraud protection capabilities. Outside manipulation can come from external hackers trying to access the data. A real case about loyalty program hacking is available here. Security of your data is critical.

Preventing loyalty scheme fraud depends on strong customer behaviour analysis. Flagging odd behaviour is important, like customers using the same loyalty card multiple times per day. Internally strong workflow-driven updates to your loyalty system will reduce internal fraud. Lastly, make sure your loyalty data is stored securely in a cloud environment to protect against external threats.

3. You believe that customer loyalty programs do not work for your business

At Bluefort we focus on how businesses can become better with Microsoft Dynamics 365 apps and technology, but as outlined before, it is always the combination of a company’s people, products and processes that drive technology to become an advantage, and in the case of customer loyalty that is not any different. So why do certain companies not believe in loyalty programs? A first approach is that the trust in the brand name represented. Sometimes, retailers and wholesalers think that the power of the brand is so dominant that people will just come and buy. Others might have had negative experiences with loyalty programs in the past; however, it is a fact that rewards and incentives drive loyalty. So, if you do not use this instrument, your competitors will. And they will win. Remember, it is always cheaper to acquire additional revenue from existing customers than to acquire a new customer.

So, start believing and build a customer loyalty program. Put technology in place to support your program and start measuring the data.

4. The loyalty scheme is not worth it for you customer

Loyalty schemes should be designed to provide a tangible rewards to your customer, based on repeat purchase behaviour. As a general concept, most of us welcome rewards; it makes us feel good to receive something as for our brand loyalty — it almost feels like an unexpected Christmas present. However, the reward needs to be representative of the contribution you have the customer has made to your business. Giving a bottle of water after 1000 EUR of orders is not going to hack it; customers will abandon your program at once. So, what does work? Depending on your data management and maturity, focus on personal rewards to customers. When you know a customer buys a lot of tennis gear, it can make sense to offer a free entrance to a prestigious tennis tournament. If you are not working with this level of data management, you can offer tangible gains to your loyal customers, like large discount when they buy on a particular day.

5. Do you listen to your customers?

There are many examples where loyalty does not provide value to customers. In fact, on a global-scale, many customer feel not listened to and do not understand their supplier or merchant's brand purpose. Having regular communication with your customers, using small polls during the buying process on the POS, or giving a 10% voucher for a small questionnaire will drive valuable insight about what your customer actually thinks of you. This input should be translated into your loyalty program and its underlying technology. Show you listen to your customer by organizing events that are relevant to your customers. The voice of the customer is the way to their loyalty.

Would you like to learn more about how we can help you deploying better Retail and Wholesale technology including Loyalty Programs?

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