What to Do When Customers are Tired of Loyalty Programs

October 10, 2017         By: Steven Anderson

Honestly, until just a short time ago, I didn’t even know that there was such a thing as “loyalty program fatigue.” It was one of the greatest means a company had—particularly one that offered a mobile app for shopping or ordering ahead—to distinguish itself in the market. As it turns out, though, customers are starting to get a bit tired of loyalty programs, and that’s likely to prompt change in what was once seen as a good way to get ahead of the pack.

A report from the 2017 Colloquy Loyalty Census drives the point home nicely as we find that the average household in the United States is part of 30 different loyalty programs. That by itself would be a problem, but worse than that is better than half of these—54 percent—are inactive. Trying to optimize each of these loyalty programs is seen as a task too great for too little reward.

Supporting word came in from Euromonitor International’s Global Consumer Trends Survey, which found that only 28 percent of customers worldwide could assert they shopped more often at venues where they had some kind of loyalty program involved. Loyalty’s overall influence was on the wane, down from an already-lackluster 34 percent back in 2013.

I can personally attest to this; I had a loyalty program membership at a grocery store chain I frequent. However, the program was somewhat difficult to administer, and often didn’t cover items that I actually purchased, thus requiring me to buy things I wouldn’t ordinarily buy to get a discount down the line. That loyalty program has since lapsed, and I have no interest in renewing it because it meant nothing to me. Bad as that was for me, it’s got to be worse for a household with 30 or more of these to manage.

In that is the solution to loyalty program fatigue: make it meaningful to the customer. Whether it’s a new focus on what’s bought or sold, or subordinating it to a smaller part of an overall customer experience response, it’s clear that loyalty by itself isn’t working. Anyone with a loyalty program—especially mobile payments operations—needs to pay close attention to this concept.