10 Costly Mistakes Omnichannel Retail Loyalty Programs Often Make

You want an active loyalty program to help your store, but you’re worried that customers won’t see it. You want to try getting it up and running, but you’re worried you’ll make a mistake you can’t afford. 

61% of consumers have reported that they are less loyal to brands than years before. The majority are bargain-hunting for lower prices in stores that provide them. Competition is high, and switching brands is easier than ever. How do you deal with that?

Well, for starters, an omnichannel integration is important for your loyalty program. Businesses that use an omnichannel strategy experience an 80% increase in store visits. The proof is in the pudding, it would help you get higher purchase rates! 

Single channel = less exposure = less customer data = less personalized customer interaction.

In this day and age, you want to have as many touch points as possible to reach your customers, or else you’ll risk a loyalty program flop!

In this article, we’ll discuss the mistakes to avoid when implementing an omnichannel loyalty program for retail.

Why Do Loyalty Programs Fail?

The reason that loyalty programs fail is that 97% of programs mainly rely on transactional rewards. When businesses are preoccupied with making customers purchase more rather than building loyalty, then there’s no good reason for customers to come back after they’ve finished buying what they want. 

That’s a big problem because loyalty is often created after the purchase, not before. So, how do you cultivate that relationship post-purchase? Strategic omnichannel integration is a start, putting visible promotions across multiple online and in-store platforms. 

Make sure that after a customer has purchased something from you, you keep communication open with them, sending consistent offers about your business that encourage continued purchases. To delve deeper, we need to look at the common loyalty program pitfalls and things to do as an alternative.

Top 10 Loyalty Program Mistakes to Avoid

1. Unappealing rewards and imprecise campaigns

If your rewards boil down to giving away free products or cutting prices at random, you’re wasting resources. Tiny rewards won’t nudge a customer in the right direction, but big directionless bonuses are also misguided. 

Your campaigns should be specific and determined by your target customer and goal; they can either re-engage old customers or motivate more expensive purchases. But each one requires unique approaches, and using the same broad strategy won’t stick.

What to do instead:

Add gamified elements to your campaign rewards, like VIP tiers. Gamification is the secret sauce that will keep standard rewards engaging. For example, SimpleLoyalty has a Spin and Win campaign. It’s a simple and fun giveaway system that generates extra revenue even once the campaign’s done. 

Customers only need to spin a virtual wheel and feel their adrenaline rise, while stores pick winners easily via the dashboard. A thoughtful campaign keeps customers coming back!

2. Generalizing customer value

When you treat all customers equally, you end up giving offers that are too generic. What happens then is that customers will also treat you the same as any other store, meaning there’s no special connection to write home about. 

Imagine being a high-spending customer and you get offered the same rewards as lower-spending ones. You’d be frustrated! There’s no incentive for you to keep purchasing because you feel like you’re not being rewarded fairly.

What to do instead:

Invest in a loyalty program that allows great customer segmentation and deep personalization. Know who your customers are, their backgrounds, and what they need. By knowing their different purchasing powers and what interests them, you can give more valuable rewards that feel right and justified for each customer.

3. Ignoring data analytics

If you’re not analyzing key metrics, you’re running your loyalty program blind. Numbers don’t lie, and if you keep up your campaigns without looking at what the data says, you’re missing out on not only profit but potential customer interactions.

What to do instead:

Pay attention to customer behavior, retention, and churn rate. Do A/B testing to figure out which part of your loyalty program works and which doesn’t. Don’t be afraid to change the campaigns that fall flat and improve on what resonates.

You may think that your loyalty program is running well, pulling in customers and revenue, but without analyzing data analytics, you can’t know which results are due to your program and which are just pure luck. Failing to measure your program effectiveness can make you miss out on growth opportunities.

4. Poor promotion

What use is a perfectly capable loyalty program if your customers don’t know about it? If your loyalty program doesn’t bring in the numbers that you’re expecting, the issue could be that YOUR promotion might also not be reaching enough numbers.

What to do instead:

Use all possible digital channels for marketing. Take advantage of websites, social media, emails, and SMS. Leave no room to chance! If you’re wondering whether it’s better to use one or the other, there’s no single winner. To maximize broad outreach AND personalized engagement, you’d need to spare some costs for multiple marketing channels. It’s worth it!

If you need proof, SimpleLoyalty once helped a hip hot pot place in Kuala Lumpur generate RM 21,985 extra sales by offering double loyalty points on off-peak days. The trick? That campaign is regularly promoted on both SMS AND social media. If you want to successfully reach customers, then you need to be present on the channels where customers actively spend their time.

5. Ignoring mobile and web optimization

Physical membership cards have become outdated in an increasingly digital age. They’re not only inconvenient, but they’re also lacking in tech-savvy features like real-time points tracking. That slower pace can be enough to stop customers from getting through the hassle of signing up.

On the other hand, mobile apps allow seamless interactions between brands and customers, making it easier to check their rewards progress. 53% of loyalty members prefer using an app to retrieve account information.

Another winning method is web-based memberships. To create a successful one, you need to picture that most customers will still access the web on mobile. So, you want your website to be easily read on customers’ phones. When customers scan a QR code at your store, you have to prepare a landing page that’s mobile-friendly. 

What to do instead:

Optimize your loyalty program for mobile usage in mind. Whether it’s apps or websites, mobile optimization can increase your loyalty program value and encourage engagement through convenient interactions and up-to-date features. Another plus is your store won’t look old-fashioned anymore!

6. Overcomplicating the redemption process

Immediacy is important. The longer it takes from redeeming points to getting rewards, the lower customer interest is in your program. Customers want instant gratification, and a slow process can remove that feeling. If you need a paragraph to explain how it works, maybe you need to rethink it from the ground up.

A complicated redemption process undermines the rewards you offer. It’s better to make a common loyalty program that is easily understandable than a unique but elaborate one.

What to do instead:

Guide customers with clear instructions and a user-friendly interface. Remove all the useless downtime and get straight to the point. A good redemption process is when customers can see how many points they earn after a purchase, track their progress on mobile or web, and then trade them for rewards directly from the same platform.

Fewer manual steps and more automation are key! You want your customers to spend more time and money in your store, not on your loyalty program navigating menus.

7. Siloing your data

Loyalty programs already give you access to actionable first-party data, but your benefits are limited if they’re isolated. Disconnected channels running at the same time can cause conflicting data and an unreasonably hard time in measuring results. It’s an extra headache you’re better off avoiding.

What to do instead:

You can break down silos with an omnichannel approach, integrating multiple channels into one cohesive experience. The upside is that you’d have the ability to measure and improve loyalty across all customer interactions. Omnichannel usually starts with a POS system that syncs up all customer interactions into your database. 

For example, a customer buys a product in your store. The next month, they get a message about their previously purchased product being back in stock. They order that product through an online shop and then track it with an app or site. That’s so many touch points that allow for promotion and engagement at multiple angles!

8. Failure to understand customers

Customers can be hard to crack. If one group thinks the price of a product is too expensive, that doesn’t mean you have to bring it down. 

You can’t go around solving problems by just listening to one group of customers; you need to take into account different segments AND smart strategies to handle all of them. Feedback is helpful in making sure that different types of customers feel heard.

What to do instead:

Utilize A/B testing to pinpoint what rewards resonate with customers and what doesn’t. Get customer feedback! If something’s not working, you need to be the first to know. 

Sometimes, data isn’t enough. You need direct testimonials. One of the ways you can do this is to encourage Google Reviews. With it, you get both feedback AND brand visibility.

9. Failure to adapt to retail trends

The retail world’s always changing, and so are customer expectations. If brands don’t keep their loyalty strategies updated, they risk falling behind.

Don’t be afraid to be flexible. Remove or add new features that help you. But don’t go overboard with distracting bells and whistles.

What to do instead:

Keep up with trends and be agile in responding to market changes and customer needs. Use top-of-the-line technology like AI-powered data collection for quick decision making.

10. Poor communication across channels

It’s important to look at your channels from a customer’s perspective, so you can get a better handle on what’s missing and what needs to be emphasized. If your online and offline channels aren’t telling customers the same thing, maybe you need to take a step back and readjust.

What to do instead:

Send regular updates through email and text. Post on social media. Put posters near the register and brochures on tables. Most importantly, keep them all aligned. Don’t let outdated promos run on even one channel.

Taking a look at a real case, SimpleLoyalty converted 40% of customers from a health-conscious store to their loyalty program. We were able to do this by putting printed cards in online-ordered packages. 

When customers scan the card, they’re able to redeem a reward in the outlet. By utilizing both online and offline tools, online-only customers were converted to purchase in-store. If you’re suffering from too many online orders but no offline shoppers, this could do the trick!

Conclusion

Omnichannel-powered loyalty programs are a surefire way to improve your customer retention, but going in blind is counterproductive to your business. That’s why you need to be aware of the common pitfalls that retail stores often fall into.

To recap, the top 10 loyalty program mistakes to avoid are:

1. Unappealing rewards and imprecise campaigns
2. Generalizing customer value
3. Ignoring data analytics
4. Poor promotion
5. Ignoring mobile and web optimization
6. Overcomplicating the redemption process
7. Siloing your data
8. Failure to understand customers
9. Failure to adapt to retail trends
10. Poor communication across channels

Ready to level up your loyalty program game? Discover how SimpleLoyalty can help you build customer relationships and drive repeat sales. Learn more and book your FREE demo today!