Your Loyalty Program Needs Work. Here’s Why.
You’ve likely signed up for a handful of retail rewards programs, and if you haven’t, then you may have been approached by an overly enthusiastic employee, clipboard in hand, faking a smile and offering you 5% off your purchase if you sign up today for the store’s reward card. Loyalty programs like these have become all too common in the retail market, designed to engage and retain customers, with mixed results.
While a select few became textbook cases of prime customer service, like the Starbucks app, many crashed and burned after some short-lived hype, such as Groupon, and most have faded into mediocrity, distinguished only by the fact that they exist. As Jeff Goldblum put it in Jurassic Park, they were so preoccupied with whether or not they could, they didn’t stop to think if they should. There’s lots of ways for you to get low balled by your local retail behemoth for the value you bring to the store, so it’s best to be aware of the stuff you get for the stuff you give.
The stuff they consider loyalty is too narrow.
In the expansive void of the hundreds of stores near, well, wherever you are, there’s at least one upbeat hipster-y coffee joint that gives you a free drink after you buy a certain amount of coffee. Usually, it’s in the form of a card that gets stamped by your cashier and makes its way to the underbelly of your car seat, accompanied by a paperclip and a startling amount of Cheetos dust.
But you’re not getting rewarded for pouring your heart and soul into that coffee joint any more than someone who buys nine coffees over the course of a year — you’re both getting a free drink, and that’s it. You’re not getting rewarded for buying stuff more frequently, referring your friends or family (or pets), or for buying bigger-ticket items. At the end of the day, the reward you get just doesn’t match whatever you put in. On the plus side, when humanity crumbles to ash and the winds of time sweep our legacy away, you’ll still probably be able to redeem that card for a mocha latte.
You get stuff to join, but not to stay.
Many big outlets, restaurant chains, and other spaces lure you in by promising a huge bonus on your purchase when you sign up, followed by a prolonged silence. You stop getting any value except the occasional email blast about a 20% discount that literally applies to everyone. Many sub-par loyalty programs go the way of the one-off, offering a single large promotion and failing to entice you to be a part of that store’s community. One of the reasons Groupon struggled is exactly that — it’ll get your foot in the door, but only long enough to use that one promotion before you lose any incentive to come back.
You get the same stuff as someone who does less.
Any loyalty program with a tier structure is guaranteed to deprive you of value at one point or another. Tiered rewards include ranges, such as bronze, silver, and gold that are defined by a certain range of spending (ie $100–500). Although it seems you’re being given an opportunity to move up and get more perks, the problem is that the value you’re getting isn’t equal to how much you put in. If you spend $500 a month at your local clothing outlet, you’re still getting all the same perks as the person that spends $100, because you’re both “bronze” members. This isn’t to say that you’re not getting anything at all, but you’re not getting enough. The rise of tiered rewards comes at a cost: you’re lumped into the same group as other shoppers, and the rewards you get only increase after you’ve made a substantially larger contribution, while all the effort in-between gets ignored.
There’s lots of ways for you to get low balled by your local retail behemoth for the value you bring to the store, so it’s best to be aware of the stuff you get for the stuff you give.
If loyalty programs are so bad, what are my options?
It’s true — many programs don’t reward you for staying engaged, while others treat you the same way they’d treat a less loyal shopper. Even still, others completely ignore your contributions to their business, offering a fixed reward for everyone, no matter what.
But that doesn’t mean they’re all bad; reward apps like Nouvo offer tons of ways to get cashback on any purchase you make, and every dollar you spend goes towards the rewards you get, while offering you huge bonuses for referring friends, outspending your fellow shoppers, and staying on board longer, all of which you can learn about by sending us passive-aggressive remarks at hello@nouvo.io or messaging us on facebook.
