Here’s Why Customers Are Leaving Your Loyalty Program (And How Best to Avoid It)

If customers love the value of additional points and the rewards system, then why are they leaving loyalty programs? Here are seven irritants that may be hurting your program and some tips to prevent this from happening.

Customers are always looking to stretch the value of their money, that’s why loyalty programs are such a hit these days. But rewards programs can only do so much to keep your customers around. Done right, you’ll get yourself loyal customers that actually stick around for years; mess it up and your loyalty program may shed some customers (along with its potential) well before its time.

And that’s an end to a lucrative marketing strategy.

But if it’s so effective, then why are customers actually leaving loyalty programs? What “irritating factors” get in the way of this otherwise successful strategy? Here we rounded some of the biggest reasons that get in the way of your success and tips on how best to avoid falling prey to these pitfalls.

Irritant 1: The registration process is boggling and complicated

What modern customers expect from a loyalty program, aside from the actual rewards, is ease of use. If the sign-up process is too complicated, you risk driving away potential users. And this is bad because they haven’t even seen your rewards yet! In fact, complicated and multiple sign-up pages is a major turn-off to 70% of customers. The registration part should not be encumbered by your desire to get as much customer information as you want; instead, look at it as a way of inviting potential users over and allowing them to discover what awaits them at your stead (that is, your rewards).

What you should do: Simplify your sign-up process.

The registration form must work like an open gate; don’t be too excited to get as much information as you like. Do that later. For now, the most important thing is getting potential users over to your side. In order to do this, we encourage the use of one page sign-up forms, as this is easily filled-out. When designing this form, do make sure you only ask customers to provide you with the basic yet crucial information. An ideal form includes the customer’s first and last name, phone number, email address, and finally, a sign-up password they will need in order to access your program. No-fuss and simple, right? 

Irritant 2: Poor user experience

User experience includes a lot of integrated aspects, but mainly talks about two: UI Design and Usability. Since it’s user-centered, it strikes the psychological factors surrounding users’ behaviour whenever they use a system (in this case, whenever they use your loyalty program). This tests your ability to compete with a lot of impressively designed rewards programs out there. Broken links, bland design, intermittent “crashes” or buffering in the system just wouldn’t fly. We cannot stress enough the importance of a good user experience. If your loyalty program cannot and does not entice the already impeccable taste of this modern market (with regards as to how it is designed and how easy it is to utilise), then you’re just setting yourself up to fail. 

What you should do: Invest in a good UX design.

Put your users at the forefront when you design and invest in a good UX Design. Do this by creating an experience that not only piques your users’ need and interest for impressive design, but also stays true to your brand. So, test the viability of your program to fulfil its intended purpose to users in the easiest, most convenient way possible.

Irritant 3: Unappealing or dispensable rewards

It’s easy for users to disregard rewards when it doesn’t speak to them. To put it simply, customers sign-up to loyalty programs not only because they want to maximise their expenses towards a certain brand; more often than not, they do this to be eligible to certain “members-only” perks. If they are not thrilled with what your loyalty program’s offering, they’re likely to jump ship to others in your industry who could give them something more interesting and valuable. 

What you should do: Offer valuable rewards that speak to your customers.

Obviously, to combat this irritant you have to craft rewards based on what your intended users would actually love to get. Effective market research can help you with this; this allows you to build a profile of your intended users. From the information, target their interests. The rewards need to be something they are interested in for users to engage. Also, think about how they could maximise these rewards: can they monetise these rewards, share it with others enrolled in the program, or spend it to get, say for example, an exclusive offer. Whatever you choose to let users do with the rewards, don’t forget to put their wants and needs at the helm of your decision-making.

Irritant 4: Program structure is complicated

Sometimes, brands can mistake offering new reward structures as a way of exciting their users. Sure, it’s not always the case. But while a good and exciting addition to rules or conditions may be fruitful, you have to be wary of the fact that more often than not, it’s just frustrating for customers. The simple points-based system worked (and is still effective to this day) because users are already familiar with it. It’s so easy to use that customers flock to it. While we’re not stopping you from adding features to structures, do remember to do this with caution: if there is no reason to “spice it up” (really, “mess it up”), leave it be. Many brands are just so ready to “inject” excitement to the structure. They don’t know that more often than not, this is just irritating to your users and leads them to the door. 

What you should do: Have an explainer page.

Since we’re not totally discouraging you from spicing things up every once in a while with entertaining rewards structure, we encourage you to have a good explainer page to accompany it. A good explainer page helps clarify questions that your users may have regarding any additions to your program. Here, you go all out. Be as specific as you can without drowning users with confusing jargon they may not know about. Start by putting yourself in your customers’ shoes and anticipating what questions they may have about your program’s structures. This usually revolves around the type of rewards they can redeem, or the steps they need to take in order to be qualified to redeem said rewards. Smile.io provides winning tips to designing a good explainer page that you could check here. 

Irritant 5: Difficulty in redeeming points

Again, this point nods to ease of use. It’s off-putting to create a redemption structure that doesn’t let your users spend their points in the easiest way possible. Just think about the idea of instant gratification; it’s birthed and bred by the commercial industry, so expect users to be hungry to get the most out of their expenses in the easiest and quickest way possible. They work towards getting the points because they want to spend it. Anything that can delay their redemption (confusing rules, longer point accumulation periods, slow confirmation) can be instant loyalty program killers.

What you should do: Shorten the period between accumulation and redemption.

A foolproof way to test the ease of your redemption guideline is to explain it in one brief sentence. If you can’t, then you better review your mechanism of redemption. If you shorten the period between points accumulation and redemption, the more likely it is for your loyalty program to be valuable to users. If they can acquire points easily, then they should also be able to redeem it with ease. 

Irritant 6: Offering the same thing over and over again

Rewards, no matter how enticing they are, can often get stale. You won’t expect to keep your users around if you don’t spice things up every once in a while. Interest could and would wane (in the commercial industry, interest could wane more quickly than others), especially since you’re pitted against so many others. It could get very bland and tiring for users to see the same rewards over and over again, which may justify any thoughts they have of leaving the program. A Collinson Group research in 2017 of Singaporean customers enrolled in loyalty programs revealed that 49% wanted variety in the rewards. The Singaporean market, especially, value a larger selection of rewards.

What you should do: Keep it fresh with limited offers or “flash rewards”.

The best way to keep your rewards fresh to your users, if you don’t intend to overhaul the whole rewards structure, is to offer limited, time-bound rewards. The introduction of these flash rewards could inject excitement into the whole loyalty system. Additionally, they will feel compelled to make the best out of these exclusive, flash offers, which makes them less likely to forget about having the points and finally spending them. If you introduce this feature, the more likely it is for your users to stick around and wait for more. 

Irritant 7: Customers are not reminded of the rewards they’ve acquired from you

With so many things going on at once, and with so much competition out there, it’s very easy for your users to forget about your program. Harsh, but it’s the truth. Especially if they are not reminded of what they’ve actually earned. 

What you should do: Remind them of what they’ve earned by keeping track of their progress and displaying their status.

Don’t risk having users sit on their points for too long they don’t even try to redeem. Send out consistent reminders of their points. After all, many can’t be motivated if they don’t know the value of what they’re hankering for. Remind them of what they could get vis-a-vis the points they accumulated over a certain period. A simple message, email, or notification on a user’s dashboard can help keep your loyalty program fresh on their minds. Show them how close they are to achieving something. This is especially important for tiered structures; if you keep them in the loop, then you could keep the user engagement high. 

The massive impact of loyalty programs could be measured only when customers actually stay and use it; otherwise, you’re looking at just another drab attempt at an otherwise good marketing strategy. Make sure you’re not prey to these avoidable disasters!