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Martech Loyalty

Key challenges with traditional loyalty programs

Cheetah Digital

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June 23, 2021 | 4 min read

In a perfect world, marketing channels would be seamlessly connected

That’s not the world brands and marketers have been living in. They’ve been failing at omnichannel loyalty because creating a solution that connects these channels often means sticking together technology platforms that do each one of these things separately: data-gathering, data actioning, messaging, loyalty, etc., hoping that through APIs and connectors that they’ll work seamlessly. This also might require multiple stakeholders from across the company to unify their strategies. Unfortunately, in reality, marketers either have too many tools to manage or loyalty systems that are disconnected from overall engagement systems. Knowing that, let’s look at some of the specific challenges marketers face when it comes to building a successful omnichannel loyalty program.

Program Strategy

Let’s start with your loyalty program strategy. This is the foundation of your program, and it’s where you can easily identify issues right away. The first issue you may face is a poor value proposition. Basically, what’s in it for the customer if they join your program? They’re giving you their valuable personal data — data that you can use to target them for future campaigns — so they expect something in return. A solely transactional relationship with your customer means they may sign up to get some rewards, but they’ll only be coming back when they can get something. When a competitor offers a different option or a more competitive price is found, customers who were with you previously may be easily swayed to spend their dollars elsewhere. Often these programs aren’t very unique or targeted either — failing to offer any personalization. Without personalization, which is heavily dependent on gathering the right kind of data, customers won’t feel valued or heard, another reason to leave your program for a different brand’s program.

75% of consumers stop engaging in loyalty programs because the program rewards are either perceived to have insufficient value or are not relevant.

~- 2021 Digital Consumer Trends Index

Technology Issues

Another pain point for brands arises because they don’t understand the technology options available to them. Or they have a loyalty technology option available to them but they don’t understand how to connect it to a system of action. When trying to jam together systems that were never meant to work together, brands can face costly integrations and end up frustrated with a solution that doesn’t work well. These unintuitive, disconnected solutions often result in inconsistent experiences across channels, meaning that the customer on the other end of the solution is getting a terrible loyalty experience, often during an in-store experience that isn’t working with what their email or loyalty app is telling them. Lastly, a pain point for customers is wanting to use their loyalty rewards but not getting real-time updates. If they can’t use it in-the-moment, they’re likely to move on to a brand that will allow them to.

Service Issues

Our third major challenge for brands seeking to build a better loyalty program is with service issues. You are not an island, nor should you be if you have the right partner. But oftentimes, marketers can experience challenges with poor account management. Having a team in place to help you is essential, but not if they’re unresponsive and fail to help you when you need it most. Another challenge is a service team with minimal domain experience. Your services team is your partner — they should be up on all of the latest trends and issues that affect your industry, as well as technology experts. Many times you are paying thousands of dollars a month for these retainers and they are not returning the value you had hoped for. An omnichannel loyalty strategy is most successful when you have true choice, either the ability to manage the programs or yourself or be backed by a strong services team.

Want to learn more about Omnichannel Loyalty? Download your copy of this essential guide to get a better understanding of omnichannel loyalty and its essential place in your marketing strategy.

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