Five pains about point-rewards loyalty programs…

Point-rewards loyalty programs




Here we go with pains about point-rewards loyalty programs…

Your point-rewards loyalty program resembles those of your competitors…!!!

In general, from the point of view of Shoppers, all point-rewards loyalty programs feel alike – the Shopper knows that she will be rewarded later for what she buys now… (…and the more she buys, the more she will be rewarded…).
“Just for you” special gifts? Personalized promos?
Tell you what: it’s just white-noise… …in other words, what a bore!
Retailers, please, PLEASE, be creative. Be different. Be original.
My two cents: give out points that matter: make sure that your point-rewards loyalty program offers rewards that Shoppers (remember, they’re YOUR Shoppers!) truly desire.
Plain-old-discounts-on-products …or… modern-exclusive-experiential-rewards (for example, cooking classes)?
…you know the answer…

Gathering knowledge about your Shoppers is not a priority…!!!

To be valuable, a point-rewards loyalty program should significantly improve:
A – Shopper-loyalty
…and, at the same time
B – knowledge about the Shopper
Often Retailers fail to appreciate B.
Why? …because it’s expensive, it’s hard, specific skills are needed, etc.
Retailers, please, PLEASE, invest the money necessary to effectively/efficiently mine the data that point-rewards loyalty programs acquire: no investment, no point-rewards loyalty program ROI.
Knowledge about the Shopper is essential!
It’s “competitive-advantage” raised to the third power!
By the way, since you’re thinking how much to invest, please, PLEASE, also make sure that your margins are high enough to support an overall *good* point-rewards loyalty program (that is: viable, feasible AND desiderable).

Your point-rewards loyalty program is not frictionless…!!!

The last thing any Shopper wants is another “card” to remember and keep track of.
Retailers, please, PLEASE, make your point-rewards loyalty program as frictionless as possible;
for example, what about using a Mobile App (with geo-location, iBeacon support, etc.) instead of an archaic plastic card with an old-fashioned barcode printed on?
I know it’s expensive, but who said point-rewards loyalty programs were cheap…?

You’re encouraging cherry-picking…!!!

The most fervent fans of point-rewards loyalty programs are Shoppers who are likely to load up on low-margin deals while earning their points (…by the way, have you ever heard the term “cherry-pickers”…?).
Retailers, are you really sure you want to reward them?
No…? …so, please, PLEASE, avoid creating your own “monster Shopper”.
Beware: economically, points programs may generate early indication of incremental sales gains, but, in time, they erode margin without the benefit of progressive, substantial sales increases.

Your point-rewards loyalty program is not the best bang for your bucks…!!!

Retailers, are you sure “Loyalty-points” are on your Shoppers’ top-ten-list of what they value about you?
…then why are you wasting so much money on a point-rewards loyalty program?
Two more (related) questions…:
1) are your point-rewards loyalty programs strengthening your brands relationship with Shoppers?
2) do they have measurable positive long term effect on your business? (…particularly in this age of Shopper short attention spans and desire for immediate gratification…!).
Again, you know the answer…

Any comment?

Andy Cavallini –



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