Loyalty Program Failures and Their Causes

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Loyalty Program Failures

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Program Loyalitas is a strategy commonly adopted by companies to maintain and increase customer loyalty. Loyalty is important because based on a survey conducted by Bond Brand Loyalty, at least 64% of loyalty program members in America stated that they would spend more to increase their loyalty points.

However, not all companies are able to implement loyalty programs well. Some experience notable failures, with various factors contributing to the failure. Here are some reasons why loyalty programs don’t always work:

  1. Not understanding customers deeply
    One of the main reasons loyalty programs fail is the lack of a deep understanding of customer needs, preferences, and behaviors. If companies fail to identify what customers really want, the loyalty program implemented may not attract attention or add enough value.
  2. Unattractive rewards
    Failure to select or provide relevant and attractive rewards is a common problem in loyalty programs. If the rewards offered do not motivate customers, then the program may be deemed ineffective.
  3. Excessive program complexity
    Overly complex loyalty programs can be a barrier to customer participation. If the rules and mechanisms for collecting points or rewards are too complex, customers may lose interest or find it difficult to understand.
  4. Lack of effective communication
    Failure to communicate information clearly and effectively to customers can result in a lack of understanding of the loyalty program. Customers who are unaware or do not understand the benefits offered may not actively participate.

Prezent is a digital voucher that provides solutions to the various factors that cause loyalty program failure above. Among them:

  1. Comprehensive dashboard report
    The dashboard provided by Prezent can be a reference for decision making and a guide to understanding customers. Prezent’s dashboard shows what vouchers have been redeemed, the nominal or denomination of the voucher, and when customers redeemed their vouchers. This can be utilized to run campaigns to be more effective and targeted.
  2. Wide range of vouchers
    Prezent voucher provides a variety of vouchers ranging from value vouchers or shopping vouchers, discount vouchers, product vouchers, credit vouchers & data packages, emoney, to PLN which are free to choose directly from the dashboard and appear through API.
  3. Ease of redeeming vouchers
    Prezent vouchers are of course very easy to use, as easy as showing the voucher code to the cashier or entering a cellular phone number. There are not many terms and conditions required during usage so customers can enjoy their rewards right away.
  4. Can be collaborated with other technologies
    Promote through various communication channels. You can send broadcast messages by collaborating with other platforms such as Sandeza. Make the message as attractive as possible with visuals that do not take up a lot of memory so that it does not take a long time when opening the message.

Empirical data provides valuable insights into the causes of loyalty program failure. To avoid such failures, companies need to focus on increasing customer participation, clear communication, relevance to customer preferences, and maximum data security. By carefully analyzing the data, companies can make the strategic changes necessary to develop effective and sustainable loyalty programs.


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