Today’s Reward Systems are Ideas of Yesterday

The Obstacles of Loyalty Programs

Retailers, merchants, airlines, hotels. The list goes on and on of all the places offering loyalty reward programs with a majority of people being enrolled in at least one, if not more, of these programs. Although widely popular, current reward programs aren’t as beneficial as they seem and have plenty of room for improvement.

Problems programs presently face:

Current program points add up slowly with no option for exchange

Expiration, restrictions and requirements hinder redemption

Limited customer data protection putting personal information at risk

As programs are presently constructed, it is extremely time consuming for customers to earn points. When the amount of money a customer has spent is compared to the amount of money, points or miles earned there is a drastic difference and it doesn’t seem as though the customer is being rewarded at all. Most customers don’t even hit the first threshold that allows points to be redeemed.

If customers could combine points in order to be able to redeem them quicker, harboring instant gratification, customers would be more eager to participate in programs due to the fact that rewards are redeemed more frequently.

On top of the longevity in which it takes for points or miles to be redeemable, those rewarded are, more often than not, only able to be redeemed where they were earned.

Say a couple were on vacation and a sushi restaurant was offering a coupon for money off their next meal as long as they dined there now, but it is a local restaurant they would never be back to, how valuable is that offer? Meanwhile, the pizza place next store is offering money off their meal now. Although the couple wants to eat sushi, the offer to save money on pizza seems more valuable.

Now, imagine if the couple could eat at the sushi restaurant at this moment and instead of redeeming that coupon on the next meal they’d never be back for, they can redeem it a restaurant in their hometown. The couple would be more likely to indulge at the restaurant they prefer to eat at, while the restaurant is more likely to gain an instant sale. It now seems more valuable to be rewarded to eat where they would like and redeem the coupon at a later date.

Not being able to exchange rewards earned only extends the length of time in which points become of any value to the customer. The less valuable a program is, the less likely people are going to be engaged and participate.

Consequently, there are currently $100 billion USD in unredeemed loyalty points. This number represents the difficulties customers face when trying to redeem the points and miles they’ve earned.

It proves nearly impossible to use points or participate in a program whose reward balances and guidelines remain a mystery. Studies show that most people are unaware of how many points they hold, what the value of those points are, as well as how to actually redeem them. A loyalty reward program can be a beneficial marketing tool used to increase customer satisfaction, customer engagement and ultimately boost sales, as long as it is accessible and clear to customers.

Even to the most informed customer, redeeming rewards can be daunting. With expiration, specific campaign periods, as well as rules and regulations all hinder the redemption process causing low levels of customer satisfaction and engagement.

Moreover, everyone’s top concern anymore is data and information protection. As it is right now, customers provide personal identifying information, as well as shopping habits and patterns, to loyalty program providers and expect anonymity and security. Unfortunately though, due to the fact that customer data is secured in one central location it is vulnerable to potential attacks. These attacks effect the privacy of people and can ruin a brand’s reputation and image.

All of these ailments displayed by the way loyalty reward programs currently operate show room for improvement. The loyalty industry is large and ever expanding, therefor it is time technology enhances these experiences for both businesses and consumers. Check out iReward.io to see the ways in which loyalty reward programs can be revolutionized.