The numbers are terrible: a recent industry survey* revealed that 54% of customers are not satisfied with their credit card loyalty program.
It could be worse! Airline loyalty programs clock in at 58% dissatisfied, with hotels scoring even more poorly at 63%.
Overall loyalty program satisfaction is 44%, down from 47%.
This dissatisfaction may explain the $100 billion in unredeemed points across loyalty programs (“The Loyalty Report” Bond Loyalty, May 2017).
Let’s be frank: big companies don’t build rewards programs to actively provide customers with a rewarding experience. Rewards programs are typically a profit center focused on the trade (sale) of points to credit card programs. The value accrues to the loyalty provider when the consumer uses the card and doesn’t redeem their points.
There is base line friction and tension here. The company wins when the customer doesn’t.
Finding loopholes or unearthing redemptions has led to the rise of forums, websites, and conferences dedicated to maximizing loyalty points (mostly miles). These resources point to the inherent complexity of programs that could and should be simple to use by consumers that have earned the points.
Loyalty program providers should be asking themselves:
- How can I provide rewards that give my loyal customers the feeling that they are getting real value?
- What experiences can I provide that show that I truly care for my loyal customers?
- How can I make the rewards process as simple as possible?
- How do I connect my rewards platform to the products I sell?
Answer these questions and the programs have a shot of at least moving above the 50% satisfaction mark!
That’s a low bar to hit, but it’s a start.
We think rewards programs need to aim higher. There is no reason satisfaction can’t be 90% or higher.
The original theory behind loyalty programs was that loyalty customer shopped more frequently and, as a result, the store earned more profit from its core product or service. The motivation was to keep a customer coming back. Modern loyalty programs seem more focused on ways to get more money out of customers through a complex network of providers.
Consumers have been trained to believe that having the flexibility to trade points is the answer. That’s only workable if you are good at the game and dedicate time to ‘working the system’. Most don’t.
The time is right for a focused, dedicated program that truly rewards loyalty customers in the right way at the right time. Less complexity. Easier redemption. More choices. Consumers deserve a better value proposition for their loyalty.
*Bond Loyalty and Visa’s 2019 Loyalty Report.