Loyalty Program Not Up to Snuff? Marketers May be the Problem.

Even though there is more focus on loyalty and retention programs, marketers don’t feel they are getting their monies worth. That dissatisfaction may be directly tied to the priorities marketers set for these programs.

In a new survey, marketers reported that their top priority was getting consumers to spend more (47%) while, at the same time, half of loyalty members gripped in a separate report that they wanted out, feeling bombarded by spam and irrelevant offers.

This has contributed to just 24% of marketers considering their loyalty efforts “very effective” and 44% “somewhat effective,” according to this new survey from SAS and Loyalty 360. Reducing churn and developing customers into brand evangelists were a distant second and third, even though marketers are finding new and innovative ways to activate their brand advocates.

Another problem appears to be that only 36% of the respondents reported high or moderate integration of loyalty data with other customer data, a likely contributor to loyalty members’ grips about irrelevant offers. (Check out these 3 Things Customers Don't Want from Loyalty Programs).

Another issue, only half of the respondents reported formal customer-lifecycle or voice-of-the-customer programs. Among those with a defined customer lifecycle, the biggest percentage (40%) believes that lifecycle begins after the sale, missing an opportunity to plant the seeds of loyalty earlier in the buy cycle while customers are still considering purchase options.

The report suggests that marketers should be focusing on integrating purchase and loyalty data streams to provide relevant benefits and communications and listening to customers and reacting to those comments to tweak and modernize loyalty programs.

“Brands that focus on loyalty as a way to create sustainable behavioral change in their brand advocates are those who will drive the financially imperative objectives needed for loyalty program success,” Mark Johnson, chief executive officer of Loyalty 360, said.

The focus on loyalty is apparent as two-thirds of survey participants have a department or functional area dedicated to customer loyalty and retention. An additional 13% plan to add one, the survey said.

The Lesson Plan: Define customers’ lifecycles, implement voice-of-the-customer programs and align loyalty programs accordingly. Don’t wait for a sale. Plant the seeds of loyalty earlier in the buy cycle, while customers are still considering purchase options.

Methodology: More than 150 customer loyalty and retention executives were surveyed online from November to December 2011 in both B2B and B2C companies to examine current trends in loyalty programs.