Customer loyalty programs don’t work

Not because they aren’t a great idea, but because most marketing types assume customer loyalty can be bought.

Browsing through lists of loyalty product start-ups, you’ll get a feeling many these entrepreneurs are itching to get their hands on data which is extremely valuable to major companies. They’ll try points programs, social sharing, and recommendations — all of which are very noble and justified tools — but almost all abide by the mantra of more rewards = more customers.

Sure offering up rewards will bring you results but you’ll quickly find that adoption and awareness rates will  be significantly lower than anything you can classify as a success even though in the carefully-crafted dashboards they may look like a success. In the world of loyalty, there’s an innate quality that these numbers just miss the mark on and that’s community building and it happens by being engaging and sympathetic to what unites the  customer and product.

I’ve worked on several points-based loyalty programs, and others based on targeted offers too, and even several others around contesting and research. Only those that do all of this with a deep connection to what the product teams are delivering, and which is all pulled together thanks to a storytelling and story-building mindset, can push through the wall of customer ambivalence into the true world of loyalty.

How to build an online customer loyalty program

  • Build a program based on who your customers are or want to become, not about the company
  • Build a program which emphasizes what your product succeeds at and rewards people for embracing that experience, as well as encourages them to become part of the evolution of the product’s weaknesses towards something they can embrace
  • Build an intuitive program which combined with a highly effective product, triggers an emotional connection like pride, competitiveness, sympathy, liberation, and release
  • Build a program around a story that people are a part of and want to share
  • Build a program which doesn’t get in the way of why you use a product
    and most of all
  • Build a program which is easy to understand

The Onion published a satire about credit card loyalty programs which touches on exactly why many programs do not work: Many programs are intended to cover for a poor experience and more expensive product, rather than be about building a community.