Customer Loyalty Programs Falling Flat? Canadian Grocer Weighs In

People love free stuff. That is largely why various loyalty programs gained popularity over the years –and of course this worked for both customer and retailer. But things are changing. Customer loyalty programs have come under fire recently as certain programs seem to fall flat when meeting customer expectations, and those programs that used to have a major influence on consumer behaviour are now being scrutinized rather than celebrated.

A recent article in Canadian Grocer spoke to this scrutiny and the overall effectiveness of loyalty programs as a whole, looking specifically at the two popular travel rewards programs which were heavily criticised after both announced expiry dates for unused points.

A key point raised in the article is that the term ‘customer loyalty program’ has become a bit of a misnomer. Whereas, in the past, these cards were meant to reward customers for continued loyalty, now they’ve come to represent something completely different. These cards don’t actually build loyalty. Instead, what they do is lead customers to expect discounts and rebates. This isn’t loyalty.

Furthermore, most Canadians have not one or two loyalty cards in their wallets, but several. Often these cards are for competing retailers. This alone illustrates that the foundation upon which these programs were built is crumbling.

However, not all customer loyalty programs are failing. According to Ken Wong, a marketing professor at Queen’s University, the best loyalty programs “are more than mere vehicles to accumulate points — they incentivize customers to buy complementary products and are personally tailored to give discounts based on what a cardholder purchases or values. Great loyalty programs take advantage of analytics to figure out what kind of offers need to be made to the consumer in order to induce purchases, which they wouldn’t otherwise make.”

Check out the article here: http://www.canadiangrocer.com/top-stories/headlines/have-loyalty-programs-fallen-miles-behind-customer-needs-71225?utm_source=EmailMarketing&utm_medium=email&utm_campaign=Newsletter.

When it comes right down to it, relying on customer loyalty programs to do the heavy lifting usually doesn’t garner the results you want. Great customer service, retail merchandising, creating an overall experience – those things work in tandem to keep customers thinking about you when they decide where to shop.

At Storesupport, we can help you build customer loyalty the old-fashioned way – with great service. Get in touch today to get a strategy started: call 1-877-421-5081 or visit www.storesupport.ca.

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