Common Mistakes in Loyalty Programme Management and How to Avoid Them 

Loyalty programmes are powerful tools for businesses looking to retain customers and boost revenue. When executed correctly, they can foster customer loyalty, incentivise repeat business, and generate invaluable customer data. However, mismanagement or misunderstanding of these programmes can lead to decreased engagement, wasted resources, and can even alienate customers. 

Here are some of the most common mistakes made in loyalty programme management and our tips on how to avoid them. 

  1. One-size-fits-all approach:  

Many businesses create a single, universal programme without considering their diverse customer base.  
Solution: Segment your customer base and offer tiered or personalised rewards to cater to different needs and purchasing behaviours. 

  1. Overcomplicated structures:  

If a loyalty programme is too complex, customers may be discouraged from participating.
Solution: Streamline the programme. Keep the rules simple and ensure the reward and redemption process is straightforward. 

  1. Setting unrealistic redemption thresholds:  

When rewards are out of reach, customers might feel the effort isn’t worth the reward.
Solution: Set achievable goals for your customers. Regular, smaller rewards can often be more motivating than infrequent, larger ones. 

  1. Not communicating clearly:  

Poor communication can lead to confusion and decreased engagement.  
Solution: Use multiple channels – emails, app notifications, SMS – to communicate and to inform customers of their reward status, changes to the programme, or special promotions. 

  1. Failing to analyse data:  

Not utilising the data gathered from loyalty programmes is a missed opportunity for growth.
Solution: Regularly analyse customer data to understand behaviour, preferences, and pain points. This can help in refining the loyalty programme and offering more tailored experiences. 

  1. Offering irrelevant rewards:  

If the rewards don’t appeal to your customers, they won’t be incentivised to earn them.
Solution: Regularly survey your customers or use purchase data to determine which rewards are most coveted and adjust your offerings accordingly. 

  1. Neglecting non-purchase engagement:  

Focusing only on purchase-driven rewards might overlook other forms of valuable customer engagement.  
Solution: Incorporate rewards for reviews, referrals, social media shares, and other non-purchase activities. 

  1. Overlooking expiration dates:  

Long or unclear expiry dates can lead to customer frustration when they find out hard-earned points have vanished.  
Solution: Make any expiry dates clear and give enough time for redemption. Regular reminders will also help customers get the value from their points. 

  1. Not adapting to feedback:  

Ignoring feedback or not actively seeking it can lead to a stagnating programme.  
Solution: Actively solicit feedback through surveys or feedback forms. Pay attention to complaints and suggestions and be willing to adapt the programme accordingly. 

  1. Neglecting programme promotion:  

If customers aren’t aware of the programme, they can’t participate.  
Solution: Promote the loyalty programme at every touchpoint – website, in-store, social media, email footers, etc. Consider launching special promotions to raise awareness and encourage sign-ups. 

In conclusion, a well-managed loyalty programme can be a game-changer for businesses. It's crucial, however, to be aware of common pitfalls and actively work to avoid them. By keeping the customer's perspective at the forefront, regularly reviewing and refining the programme, and staying responsive to feedback, businesses can cultivate a loyalty programme that genuinely fosters customer allegiance and drives business growth. 



About the Author

Laura Lloyd

Laura Lloyd

Laura’s goal is to develop partnerships with clients, seeking to understand their challenges in order to provide creative, value add solutions. Laura always seeks to provide a ‘no challenge is too big, no problem is too small’ attitude and aims to always exceed expectations.


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LoyaltyStream Key Features

  • 21 loyalty campaign types to suit every business
  • Options to deploy gamification campaigns such as Spin-To-Win and Prize Draws as well as Badges
  • Ability to track and reward all behaviours from transactions to actions
  • In-depth visual analytics and insights on Campaigns, Members, actions and transactions
  • Customisable CRM and segmentation options to suit your Member profile
  • Scalable modular SaaS platform that can grow with your business


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