4 Loyalty Rewards Program Challenges, Solved

  • author

    Hannah Prince

  • posted

    Apr 27, 2023

  • topic

    Digital Marketing, Sales

4 Loyalty Rewards Program Challenges, Solved

It’s not surprising that customers love a good loyalty rewards program. In fact, nearly a third (30%) say that the benefits and rewards of a loyalty program are one of their top reasons for regularly patronizing a business.

But setting up and maintaining a customer rewards program can be a complex undertaking for marketing teams — and one that’s sure to present its fair share of challenges. Here are four common loyalty program issues and tips on how you can solve them.

READ MORE: 10 Stats to Show the Importance of Rewarding Customer Loyalty Now

I Need to Build a Loyalty Rewards Program and Don’t Know Where to Start

As the saying goes, start at the very beginning: What are the goals for your program? By getting input from all the stakeholders, including leaders in both marketing and sales (and maybe even product or UX), you can help ensure you’re keeping the ultimate goals in mind. Maybe you need more product feedback. Maybe you need to improve customer retention or build advocacy. Whatever it is, that main goal will inform the activities you decide to reward.

Beyond that, you should start to think about a few key details, such as the structure for your program. Should you offer instant rewards or use a points-based system? This will depend on how many different actions you want to encourage and what kind of budget you have available.

Then, move to the logistics. What tools do you need to manage your loyalty rewards program, and how much maintenance will be necessary? This again may depend on your budget, but wherever possible, get tools that work together to streamline your processes, such as rewards management and community platforms that integrate.

I’m Not Getting Enough Customer Participation

If customers aren’t engaging enough with your loyalty rewards program, you should start by looking at the different pieces to see what could be done differently. For instance, are you offering the right rewards, ones that are useful and flexible? According to PwC, the most important parts of the personalized experience that consumers want are rewards for products they use regularly (48%) and a loyalty program with flexible rewards (43%). Consider expanding the selection of rewards available to make it a more appealing offer.

Another way to increase participation is to launch a short-term promotion that gives more points or rewards for certain actions for a certain period of time. If you can get customers invested by sweetening the pot with an extra reward, then hopefully you can nurture that connection to build trust and more ongoing engagement.

Our Loyalty Rewards Program Is Too Time-Consuming to Manage

Maintaining a loyalty rewards program can be a full-time job, especially if you have a manual process for distributing rewards or are sending physical gifts. Start by switching to digital rewards, which can be delivered easily and instantly. Also consider how you can automate some of the tasks that are costing your team hours of admin work. For instance, try a digital rewards tool that integrates with your marketing automation platform or community software. That way, you can set up the program once, with the appropriate triggers and limitations, and let it distribute the rewards automatically.

The Budget for My Program Was Cut and I Need to Reduce Costs

Marketing teams everywhere are seeing their budgets cut as economic pressures increase. But in these times, rewarding customer loyalty becomes even more vital. So before you suspend the program altogether, try some of these strategies for reducing reward costs:

  • Deliver rewards digitally. If you’re still sending physical items or gift cards to reward customers, going digital will save you both time and money, since digital rewards are free to send via email.
  • Change up your reward offerings. Consider giving out only digital gift cards that are still useful in smaller denominations, such as for coffee or fast food, rather than those that need to be more valuable, such as for airlines and luxury stores.
  • Switch to a points-based model. Instead of rewarding each task individually, establish a points program to help limit the number and frequency of rewards.
  • Adjust your points thresholds. If you’re already using points, then take advantage of the flexibility for how many points each action earns, what each point is worth, and how many customers have to accumulate before they can redeem a reward.
  • Use a rewards provider with transparent pricing. If you’re working with a tool that doesn’t return unclaimed rewards, you may be paying a lot more than you think. A more transparent pricing model, like BHN Rewards’ 100% refunds on unclaimed rewards, means you know your total costs upfront. 

Want more tips to make your loyalty rewards program even better? See what the best programs have in common!

about the author
Hannah Prince

Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.

Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.