Troubles with Loyalty Reward Programs today
Earning a customer’s loyalty is important for any business, and one of the best ways to do so is through a loyalty program. Customer loyalty is paramount to brands’ success — because loyal customers can grow business faster than sales and marketing.
As a result, the depth and diversity of reward programs are vast, ranging from the multiple programs of grocery outlets like Giant and Cold Storage, to Citi ThankYou by Citibank, to the assortment of reward points programs by F&B groups like JAPAN POINT and Starbucks.
74% of loyalty program participants agree that loyalty programs make them more likely to continue doing business with a company, and 67% agree that they shop more frequently and spend more at retailers with loyalty programs.
However, troubles lurk below the calm surface.
The report also showed that those who do not make redemptions are 2.3 times more likely to defect from a program and join another. Because of this, besides customer inactivity, unclaimed rewards are accounted for as liabilities on company balance sheets.
“Earn and Burn Consumers” who look for instant gratification or discounts from their loyalty programs. 15% of them will redeem rewards within a month of earning, while only 3% will transfer rewards from rarely used programs to highly used programs.
“Save-For-Later Consumers” who will treat their rewards like cash and save up before making a purchase or payment. 12% of them will accumulate rewards for gifts or special occasions while 27% will accumulate rewards until they are valuable enough to redeem.
Redemption is the key to member experience, but…
Consumers like loyalty programs, but they are abandoning them.
Here are some of the reasons why most loyalty reward programs are not sailing at their full potential.
The Solution?
Synchronise the contrasting reward programs onto a networked loyalty platform with each maintaining an independent flow of operations to create a harmonious ecosystem.
The platform will not interfere with the business strategies of participating programs to allow program providers to better regulate and tailor their rewards.
The use of blockchain technology will allow the source of all loyalty points to be effortlessly authenticated, curbing fraud and deepening security. With its internal crypto-token economy, the system controls inflation and tracks the stream of loyalty points on the platform.
To learn more about the connected loyalty ecosytem and how Reefic Protocol can help, read “Building Reefic Protocol — A Connected Loyalty Ecosystem” next.
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