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Building vs. Breaking Loyalty

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Loyalty programs run rampant across the retail industry, but in too many cases, programs that fail to reward the best shoppers may leave them feeling under-appreciated -- a kiss of death in an environment in which long-term loyalty can make or break a retailer.

Rewarding consumers for their visits and purchases may be key to luring shoppers in, but unless chains educate shoppers about programs -- and stay true to established benchmarks -- they are destined to fail.

According to a study from payments provider ACI Worldwide, 81 percent of American consumers enrolled in loyalty programs don’t know what membership benefits include or how or when they will receive rewards. Worse, more than 40 percent have had a negative experience with a loyalty program, and only 27 percent report having received a loyalty reward or promotion that made them feel like a valued customer.

“We live in a world that has so many programs available to capture customer loyalty that consumers have become overwhelmed,” says Matthew Janopaul, president and CEO of Pasta Pomodoro. “A loyalty program that delivers a disservice to customers because it doesn’t work or is difficult to understand is only aggravating the customer vs. building loyalty.”