Blogs - Loyalty Experience Platform | Annex Cloud (2024)

FAQs

Blogs - Loyalty Experience Platform | Annex Cloud? ›

However, we have observed that around two-thirds of established loyalty programs fail to deliver value, with many actually eroding value.

However, we have observed that around two-thirds of established loyalty programs fail to deliver value, with many actually eroding value.

It stands to reason that as customers continue to get higher levels of value from their membership, they'll become more committed to using your services or products. Likelihood to purchase, frequency of purchase and willingness to recommend, share or invite a friend all skyrocket with good loyalty plays.

A study by McKinsey, for example, found that customers who are members of a loyalty program are 59% more likely to choose a brand over a competitor and 43% more likely to buy weekly. In fact, the study found that customers who are members of a loyalty program are 62% more likely to spend more on the brand.

The Forrester Wave™: Loyalty Technology Solutions, Q1 2023. This report provides an in-depth evaluation of 12 of the most significant vendors in this market: Annex Cloud, Bond Brand Loyalty, Capillary Technologies, Comarch, Epsilon, Kobie, Mastercard, Merkle, Oracle, Punchh, Salesforce, and Tenerity.

It's Too Difficult or Takes Too Long to Earn Rewards

According to Statista, 45% of US customers claim that rewards taking too long is the number one reason for disliking a loyalty program. In second place, 31% of customers say they get frustrated when earning rewards is too difficult.

Offer financial rewards, non-monetary rewards, and recognition. There are many different types of rewards to motivate employees, but reward systems that include a combination of cash and non-monetary rewards as well as social awards, such as recognition and praise, have the greatest impact on employee performance.

Risk of Attracting only Deal-Oriented Customers

Another potential drawback of loyalty programs is the risk of attracting primarily deal-oriented customers. These customers chase savings, incentives, and discounts, making them less likely to remain loyal to a specific brand once the rewards are no longer available.

Your loyalty app's structure, rewards, look, and functionality should be built around the experience you want to offer your customers to keep them engaged and coming back time and time again. Look for a provider who will learn what that experience looks like and build a fully customized solution for your brand.

CRM needs only a customer's email address. Loyalty programs involve sharing more personal data with a brand, such as transactional and emotional data, allowing for more individualized offers and rewards. CRM helps companies gain an initial understanding of preferences and early emotional motivations.

Who is better Gartner or Forrester? ›

Forrester rates 4.3/5 stars with 35 reviews. By contrast, Gartner rates 4.0/5 stars with 79 reviews. Each product's score is calculated with real-time data from verified user reviews, to help you make the best choice between these two options, and decide which one is best for your business needs.

Mistake #1 – Erroneous Reward Selections

This is the prime that causes the failure of a loyalty program. If the terms and conditions are unclear or the program does not align with your business offerings, it will not get successful.

The average loyalty breakage rate varies depending on the type of loyalty program and the industry. Some studies have reported average breakage rates ranging from 5-30%, while others have reported higher or lower rates. For instance, retail loyalty breakage is around 25%, while airlines deal with much higher rates.

62% of consumers spend more money on a brand after signing up for a paid loyalty program (McKinsey) Paid loyalty programs incentivize customers to stay loyal to brands. 59% of paid loyalty members are more likely to choose that brand over competitors, and 43% are more likely to make weekly purchases.

Customer Retention Loyalty Program Statistics

Loyalty programs have been shown to cause 54% of a company's customer base to increase spending with that company. Almost half of a company's revenue can be attributed to approximately 8% of their most loyal consumers.