Five potential mistakes about our point-rewards loyalty programs


Potential mistake #1

Our point-rewards loyalty program resembles those of our competitors

From the point of view of our Shoppers, all point-rewards loyalty programs sadly feel all alike – the Shopper knows that she will (hopefully) be rewarded later for what she buys now… (…and the more she buys, the more she will be rewarded…).

“Just for you” special gifts? Personalized promos? …just white-noise…

Let’s be creative, different, original – my two cents: give out points that matter: make sure that our point-rewards loyalty program offers rewards that Shoppers (remember, they’re OUR Shoppers, and we want to keep them) truly desire.
Boring plain-old-discounts-on-products …or… exciting modern-exclusive-experiential-rewards? (for example, cooking classes, priority queues at check-out desks, etc.)

Potential mistake #2

Gathering knowledge about our Shoppers is not a priority

To be valuable, a point-rewards loyalty program should significantly improve:
A – Shopper-loyalty
…and, at the same time
B – knowledge about our Shopper

Often we fail to appreciate point B.

Why? …because it’s expensive, it’s time-consuming and specific skills are needed.

Let’s invest to effectively/efficiently mine data that point-rewards loyalty programs acquire: no investment, no point-rewards loyalty program ROI.
Knowledge about our Shopper is essential; it’s “competitive-advantage” raised to the third power.

Potential mistake #3

Our point-rewards loyalty program is not frictionless

The last thing any Shopper wants is another “card” to remember and keep track of.
Let’s make our point-rewards loyalty program as frictionless as possible;
for example, what about using a Mobile App instead of an archaic plastic card with an old-fashioned barcode?

Potential mistake #4

We are encouraging cherry-picking

The most fervent fans of point-rewards loyalty programs are Shoppers who are likely to load up on low-margin deals while earning their points (…by the way, we know the term “cherry-picking”, don’t we?).
Are we really sure we want to reward them?
No…? …so let’s not create our own “monster Shoppers”.
Beware: economically, points programs may generate early indication of incremental sales gains, but – in time – they risk to erode margins without the benefit of progressive, substantial sales increases.

Potential mistake #5

Our point-rewards loyalty program is not the best bang for our bucks

Are we sure “Loyalty-points” are on our Shoppers’ top-ten-list of what they value about us?
…then why are we wasting so much money on a point-rewards loyalty program?

Two more (related) questions…:
1) is  our point-rewards loyalty program strengthening our relationship with our Shoppers?
2) do point-rewards loyalty program have measurable positive long term effect on our business? (…particularly in this age of Shopper’s short attention span and desire for immediate gratification…).

Andy Cavallini  –


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