Playing for retention? Here are 5 customer loyalty mistakes you are probably making

Tony Chen
Playing for retention? Here are 5 customer loyalty mistakes you are probably making

Your regular clients expect the similar or even better experience each time they use your product or service

Advancement of technology has opened various channels of customer acquisition, but it also raised fierce competition for retailers. Every retailer is leveraging the power of customer loyalty segment; If you’re not using it yet, it is the right time to launch a new one.

Many brands use client loyalty campaigns for their retail segment not only to acquire new client-base but also to dramatically raise their retention rate. Though this sort of campaign requires a lot of investment, the possibility of amazing ROI always diverts the marketing departments to this direction.

It requires time, money, and resource allocation for improving their customer experience. Trying to adopt a single change in your loyalty program can negatively impact your customer experience, so you need to be very careful about any rapid change you’re about to launch.

When your regular clients try to see the information about your services, products or the discount offers, they expect the similar or even better experience each time. This is where your technical team should work synchronously on your website, mobile app, and/or affiliate platforms.

Random changes based upon your A/B testing experiments may hurt their experience and you don’t want losing your potential customer to your competitor. Based upon various case-studies, participants’ inputs in surveys and experts’ opinions, here are the top five mistakes retailers are probably making.

1. Failure to acquire and manage customer data

The major point of success of any customer retention and loyalty program depends upon how you are using the existing customer data. One of the biggest mistakes in such programs is not giving the proper attention it deserves. Copying the strategy used and tested by one retailer might not work well for you; It all depends upon your industry and your customers, so it should be tailored every time in each step of your retention funnel.

This data sheet should have a place in your CRM data bank, which you can use at the various phases of new client acquisition program. As I said earlier, all the surveys give a thumbs-up on the data collection. Data is the key, but it depends on how you make enhancements using it.

2. Failure to integrate

The first point clearly identifies the core value of customer data for the real success of various customer programs, but retailers usually go wrong multiple times with the kind of data they need. The possible reason for this failure was the wrong integration of CRM with your customer orientation programs. Have you integrated your loyalty program with your POS system or eCommerce website? Don’t tell me “NO” – because if your answer is NO, then how would you be able to create highly segmented campaigns, bring personalization in your loyalty programs and offer the best credits to your customers?

3. No logic in customer segmentation

At this phase, you actually take a step ahead and group your customers based on their primary data including gender, age, and buying patterns, etc. One of the common factors of previous loyalty programs’ failure is the wrong customer segmentation into groups.

Also read: New startups, this is what you need to know about gaining and retaining customer loyalty

It is closely related to the first two points described above – either the collected data is not enough, or the data stored in CRM is not insightful. As a result, buyers show resistance to these types of loyalty credits and the campaigns fail. According to a report, 78% of users leave loyalty programs faster than five years ago.

An example:

Joe is working in an IT organization, and he did purchase three times from the “ACME” e-commerce website. Now Joe is on the email subscription list of ACME (though he never subscribed to ACME’s promotional offers). He recently received an email from them showing a new bridal collection of necklaces and wedding dresses. This specific email may push Joe to never visit their website again, because he didn’t buy any female accessories from ACME. So, what’s the point in sending him the bridal collection?

4. No communication flexibility

Communication is key, but abusing it or not embracing it can both harm you. Have you figured out the best way to communicate your audience? Is it through email? How about phone?

If the vendor tries to contact customers frequently, this may result in low response rates from customers. On the other hand, if the communication is very slow, some other vendor can cash the opportunity with their client orientation programs. So the key to successful communication always depends upon customer’s preference. You need to gather this data, and you can go ahead and ask customers at your initial point of contact. How often do they want promotional emails? Do they prefer phone calls or messages? Are you tracking their visits and purchase journey?

5. You are not aggressive enough

Is your approach stagnating even though the results achieved so far are not promising? You need to be a creative game changer when it comes to running loyalty programs effectively. It could be any component which gives a new edge to your program — this can include gamification or other reward scheme, for instance.

What’s your take? Have you done some great work with customer loyalty programs? Please share your inputs.

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